In September 2022, when he found out that Alameda had been using FTX customer funds, Nishad Singh said he asked to speak with the founder of Alameda and the CEO of FTX. They were both, of course, Sam Bankman-Fried. Singh and Bankman-Fried met on the balcony of the penthouse they shared in the Bahamas, which was spacious enough to include a pool, around 8PM or 9PM local time. As Bankman-Fried sprawled in a white chaise lounge, Singh paced anxiously.Â
âIâm not sure what there is to worry about,â Bankman-Fried told Singh, according to Singhâs court testimony today.
What about the $13 billion Alameda owed to FTX, Singh wanted to know.
âRight, that,â Bankman-Fried replied in Singhâs retelling. âWe are a little short on deliverable.âÂ
How short? Well, they could pay back $5 billion of the money â a cool $8 billion less than they owed.
âI felt really betrayed.â
To really set the scene as Singh testified, prosecutor Nicolas Roos pulled up a photo of the balcony in question. Barbara Fried, the defendantâs mother, appeared incredulous as the luxury balcony appeared on the screen. As Singh told the story of the conversation, Fried appeared agitated, occasionally glancing in the direction of her son.
Asked how he felt about discovering the hole in the balance sheet, âI was blindsided and horrified,â Singh said. âI felt really betrayed.â But he felt he couldnât leave. He wouldnât be able to live with himself if his departure meant that FTX fell, and the fall was avoidable. Bankman-Fried had told Singh he was indispensable.
Like Gary Wang before him, Singh had briefly been a paper billionaire â he owned â6 or 7â percent of FTX. He got a salary of $200,000, and equity in FTX in lieu of bonuses from 2020 on; before that, his bonuses had been as much as $1 million. He was also a long-time friend of Bankman-Friedâs younger brother, Gabe, and had known the defendant since high school. In a black suit and red tie, Singh looked much younger than his years, like a member of a high school mock trial team. When he stepped down from the stand as we took a break for lunch, he took a hit from an asthma inhaler.
Singh has pleaded guilty to six felonies. He says his co-conspirators in committing these crimes were FTX executives Ryan Salame and Gary Wong, Bankman-Fried, and Alameda CEO Caroline Ellison. All of them have pleaded guilty to assorted crimes as well â except Bankman-Fried.
âIâve always been intimidated by Sam.â
âIâve always been intimidated by Sam,â he said. (The defense objected to this, and it was overruled.) Singh said that Bankman-Fried was a âformidable character, brilliant.â Singh also called the actions he and his co-conspirators took âevil.â
Singh was late to the conspiracy, and didnât find out about it until September 2022. But even before that, he was âembarrassed and ashamedâ about Bankman-Friedâs âexcessiveâ approach to spending. Though heâd complained to Bankman-Fried, he was told that the real problem was âpeople like me sowing seeds of doubt in the company decisions.â That comment was made in front of other people in the office, which Singh found âpretty humiliating.â
That was the introduction to how Bankman-Fried splashed his cash around. One of the investments was Genesis Digital Assets, a Bitcoin mining company. The idea of Bitcoin mining perplexed Judge Lewis Kaplan, who inquired about an explanation. (It was one of several times this would occur with jargon Singh used in his testimony.) Singh explained that these were banks of computers solving puzzles in order to get a reward and add a block of transactions to the blockchain.
Kaplan sighed. âWell, Iâm sure thatâs the best Iâm going to get.â The courtroom laughed.
âKendall and Kris Jenner, I honestly could not tell you what they do.â
There was also a discussion of K5 Ventures, a venture capital firm run by Michael Kives. We saw a memo in which Bankman-Fried said Kives was âprobably, the most connected person Iâve ever metâ and described a dinner with guests such as Hillary Clinton, Doug Emhoff, Katy Perry, Orlando Bloom, Leonardo DiCaprio, Jeff Bezos, Ted Sarandos, Kendall Jenner, Kris Jenner, and Corey Gamble. Singh read the names aloud and briefly described what each did â though he didnât recognize Sarandos or Gamble.
âKendall and Kris Jenner, I honestly could not tell you what they do,â he said, inspiring another wave of laughter. It had been a funnier day in court than most.
Bankman-Fried saw K5 as a âone-stop shopâ for relationships, and wanted to commit up to $1 billion of capital to the firm in the long-term, something Singh objected to. Singh felt the firm was âtoxic to FTX and Alameda culture,â but Alameda Research Ventures invested anyway.
We then saw a spreadsheet of endorsement deals, including those for Steph Curry, Tom Brady, Gisele Bundchen, the FTX Arena, and Larry David. In total, Bankman-Friedâs entities spent $1.13 billion on endorsement deals.
âSamâs a fan of views.â
Singhâs testimony painted Bankman-Fried as very loose with money â investing broadly in real estate as well. We saw a spreadsheet of the properties FTX had leased and purchased, including both of Bankman-Friedâs apartments and the one his parents lived in. (At this point, Joe Bankman and Barbara Fried switched legal pads, apparently their way of passing notes.) As for the penthouse, Singh didnât want it, and neither did some other members of the group. But âSam really liked this one,â he said. âSamâs a fan of views.â Finally, Bankman-Fried told his prospective roommates that heâd pay them $100 million to make the drama go away, which Singh took as a signal to shut up.
Even before he knew about Alamedaâs special access to FTX, Singh had been involved in other shady transactions. For instance, in December 2021, Singh created some back-dated transactions that pushed FTXâs revenue âover the lineâ to $1 billion. He did that by changing the rules around the staking of a token, Serum, such that FTX got 25 percent of the rewards. This information was provided to auditors, he testified.
Singh also testified to âallow_negative,â the damning bit of code Gary Wang had talked about during his own testimony. Singhâs initial understanding was that it was, in part, to let Alameda transfer the FTT token Wang and Bankman-Fried had invented. Bankman-Fried assigned Singh the project, and Wang came up with the specific details about how it would function. Later, when he found out how else it had been used, Singh said âthis seemed like a real abuse of a feature I believed until that pointâ was serving FTX. But when he discovered how big the hole in the FTX balance sheet was, he knew âthis couldnât have been a mistake.â
In August 2022, Singh transferred the money Alameda owed to the âKorean friendâ account, seoyuncharles88, without explaining why that name had been chosen. The reason: to keep Alameda from having to make interest payments on the debt.
Ellison told him, verbatim, âthatâs impossible.â
In September 2022, Singh noticed that Alameda didnât have nearly enough collateral on its obligations if the enormous line of credit wasnât included. He said there were points where Alameda was $10 billion short on their collateral. So Bankman-Fried suggested that Singh, Wong, Ellison, and Bankman-Fried transfer their personal Serum tokens to Alameda. Then Singh could back-date the transfer, to make it look as if the funds had been there all along. The point was to fool the eventual recipient of the data: the Commodities Futures Trading Commission. Singh refused.
He remembered the same conversation about shutting down Alameda that both Ellison and Wang had described in their testimony. Singh suggested closing Alamedaâs accounts on FTX, and letting the company trade elsewhere. Ellison told him, verbatim, âthatâs impossible.â And that, according to Singh, was when he discovered that Alameda was undeniably using FTX customer funds. Why else would it be impossible? âThat was absolutely devastating,â he said.
And that was why he wanted to meet with Bankman-Fried on the balcony; his bedroom was often used for meetings by others, and he wanted privacy to discuss the situation. They met a second time, in Bankman-Friedâs private apartment, after he returned from a trip to the Middle East to try to raise capital.
âIâm really not doing well,â Singh told Bankman-Fried, according to his testimony. Barbara Friedâs head was in her hands as he testified; she looked as if she might be crying.
Singh tried to reel in spending, in the hopes of closing the hole
As Singh talked to him, he noted that Bankman-Fried seemed to be on edge; he was grinding his teeth and closing his eyes, which Singh said were tells for when Bankman-Fried was angry. âI ended up apologizing to him at the end for asking for the meeting because I could tell it was so unwelcome,â Singh said.
Singh tried to reel in spending, in the hopes of closing the hole, he said. But Bankman-Fried then invested $250 million in Modulo Capital, a hedge-fund led by some of his associates in September, and later in Anthony Scaramucciâs Skybridge Capital too.Â
This was when the truly weird shit started in testimony: Singh began discussing his political donations. Apparently multiple people, including Ryan Salame, the former FTX executive, had access to Singhâs bank accounts. Money from Alameda would be wired in, then sent out to approved causes. This was coordinated on a Signal chat called âdonations processing,â which included Gabe Bankman-Fried. âMy role was to click a buttonâ approving the transaction, when a confirmation request arrived in his email, Singh said.
In one conversation, a political consultant wrote, âCan we get the $20k from @NishadSingh for the Delaware Democratic party today?â Salame replied, âOn it.â Then he messaged the group telling Singh that he needed to check his email to approve the transaction, as well as five others.
Singh also testified that he signed blank checks from another bank account, at Gabe Bankman-Friedâs request
Singh also testified that he signed blank checks from another bank account, at Gabe Bankman-Friedâs request. That was used by Gabe to make donations for Guarding Against Pandemics, his advocacy group. First, Singh had given him their credit card, but that stopped working. A PayPal account also ran into issues. So an assistant was flown out to Singh with checks for him to sign.
After the September conversations, Singh understood the money was coming from customersâ funds, he said.Â
When November came, and the FTX collapse began, Singh said he was suicidal. At one point, he asked Bankman-Fried to clarify that the FTX CEO had orchestrated the entire thing. That didnât happen.
I have been struck, throughout the trial, by how the inner circle at FTX and Alameda were the people Bankman-Fried was closest to: his college roommates Adam Yedidia and Gary Wang; his ex-girlfriend Caroline Ellison; his brotherâs childhood friend, Singh; his brother Gabe; and, of course, Barbara Fried and Joseph Bankman.Â
Even if Sam Bankman-Fried believed himself to be innocent, he probably could have spared some of these people by doing what Singh asked him to do in November 2022: taking responsibility and turning himself in. Instead, I am watching Bankman-Friedâs mother cry in court as a man whoâs known Bankman-Fried since high school testifies against him.
On November 20th, 2022, Singh had his first meeting with prosecutors. Of the inner circle, Wang cooperated first. Singh was second. Ellison was third.Â