Former FTX exec Nishad Singh avoids prison time after cooperating with authorities in crypto exchange collapse: reports

Nishad Singh, FTX's former engineering director was given no prison time after pleading guilty to criminal charges, including fraud following the collapse of the crypto exchange, according to multiple reports. 

Judge Lewis Kaplan of New York sentenced Singh to time served and three years of supervised release, according to reporting from Inner City Press. 

Singh's lawyers previously asked for the New York court to not impose jail time and said his "role was far more limited than any other defendant." Singh pleaded guilty in February 2023 to six criminal charges, including fraud and conspiracy to commit money laundering.

FTX collapsed in November 2022 after filing for bankruptcy following a liquidity crisis and fraud allegations. Alameda Research, a trading firm with close ties to FTX, also fell.

Former FTX CEO Sam Bankman-Fried was sentenced to nearly 25 years in prison on March 28 and ordered to pay back up to $11 billion in investor and lender losses. He was found guilty in November 2023 of seven criminal counts, including two counts each of wire fraud and conspiracy to commit wire fraud, as well as several counts of conspiracy to commit securities and commodities fraud, among other criminal acts.

Singh cooperated with authorities in testifying against his former boss, Bankman-Fried, in October 2023.

During Bankman-Fried's trial, Singh said the Bahamas penthouse he and others shared with Bankman-Fried was "super ostentatious" and described how they nearly bought a more affordable place, but "Sam’s a fan of views."

Singh also testified that during a one-on-one conversation with Bankman-Fried on the balcony of that Bahamas penthouse in September 2022, mere weeks before the exchange collapsed, Singh said he asked Bankman-Fried about Alameda's financial situation and the $13 billion of borrowed funds that he learned Alameda couldn't repay.

Bankman-Fried said they were "a little short on deliverables."

"I was blindsided and horrified. I felt really betrayed," Singh testified, though he remained at FTX. Singh said he was “overwhelmed with remorse” and said he knew that Bankman-Fried could be “deceptive” and “self-serving."

Judge Kaplan said he believed that Singh’s involvement was narrower than Bankman-Fried’s or Ellison’s, according to reporting from Inner City Press.

Former co-CEO of Alameda Caroline Ellison was sentenced in September to two years in prison for her role after cooperating with prosecutors. FTX cofounder Gary Wang has also cooperated and is set to be sentenced on Nov. 20. Former co-CEO of FTX Digital Markets Ryan Salame began his prison sentence of seven and a half years earlier this month.

Bankruptcy cooperation

John Ray III, FTX's current CEO, who handled the exchange's bankruptcy proceedings, said Singh has helped and cooperated with the debtors. According to Ray's letter filed to the court on Tuesday, Singh answered their questions and provided necessary documents.

"Given Mr. Singh’s senior position within FTX prior to Chapter 11 Cases, his extensive knowledge of FTX’s systems and processes, and his personal involvement in many key events and transactions, the Debtors expect that his cooperation will continue to be important to maximize recovery for the creditors," Ray said.

Earlier this month, a U.S. judge approved FTX's bankruptcy plan to distribute funds to creditors. Under that plan, 98% of creditors will receive at least 118% of their claim value in cash. The plan faced criticism from Sunil Kavuri, a representative of the largest FTX creditor group. Kavuri said the estate should have paid out cryptocurrencies in kind rather than the dollar value when the exchange filed for bankruptcy two years ago.

A lawyer representing Seth Melamed, the former chief operating officer and representative director of FTX Japan accused Singh of making multiple "misstatements," in his sentencing submission. 

Those inaccuracies involved Singh's knowledge and attempts from Bankman-Fried and Wang to switch the structure of the wallets for FTX Japan. 

"There was no scenario in which SBF, Wang, or Singh could have persuaded Mr. Melamed to change how wallets were managed. Mr. Melamed could not and would not deviate from Japanese regulations or FTX Japan’s internal guidelines and policies that were in place to securely segregate client funds," his lawyer said. 

Update: Oct. 30, 9:10 p.m. UTC to include details about Melamed's filing