No jail time for former FTX exec Nishad Singh, an early cooperator against Bankman-Fried

MANHATTAN (CN) — A federal judge on Wednesday afternoon credited Nishad Singh’s substantial assistance to prosecutors as he sentenced the key cooperator in the criminal fraud case against Sam Bankman-Fried to time served, plus three years of supervised release, for his role in FTX’s theft of more than $8 billion in customer funds.

Singh, formerly FTX’s director of engineering, testified against Bankman-Fried at trial pursuant to cooperation plea agreement reached in February 2023, in which he pleaded guilty to charges of wire fraud, commodities fraud, securities fraud, money laundering and campaign finance violations.

The 29-year-old wore a light gray suit and red tie to the sentencing hearing in the Southern District of New York.

Prosecutors supported a lenient sentence in light of Singh’s cooperation, while Singh’s lawyers requested that the judge impose a noncustodial sentence of time served.

U.S. District Judge Lewis Kaplan said the haste and breadth of Singh’s cooperation with prosecutors underscored “serious moral interest,” beyond just self-interest.

“You very quickly, within days of the bankruptcy, told the truth,” the Clinton-appointed judge said. “And what’s even more telling is the extent to which you immediately and truthfully, and as far as I can see, fully unburdened yourself to the government about wrongdoing of which you were aware and they were clearly were not.”

Kaplan noted that prosecutors’ letter in support of a reduced sentence for his cooperation was “the longest 5K letter I ever saw.”

Singh’s defense attorney Andrew Goldstein, a former chief of the public corruption unit at the U.S. Attorney’s Office for the Southern District of New York, urged the judge to consider Singh’s “laudable, across-the-board cooperation” and ongoing aid in helping FTX debtors recover assets.

“His conduct was not in the same ballpark as the others,” Goldstein said.

Early cooperation

Assistant U.S. Attorney Nicolas Roos said Wednesday that without Singh’s proffers and interviews, an entire campaign finance scheme implicating Bankman-Fried that was not previously known about “would only have been discovered by the detailed tracing of financial records.”

“The way his cooperation here was so important … was the way he approached this from the outset, immediately accepting his role in defrauding customers,” Roos said.

At Bankman-Fried’s trial, Singh said that before FTX’s collapse into bankruptcy in November 2022, Bankman-Fried directed the company to spend large sums of money in 2021 and 2022 pursuing cultural and political powers in a bid to legitimize cryptocurrency and bolster FTX as the superlative exchange for cryptocurrency trading.

Bankman-Fried, 32, was sentenced to 25 years in prison and is serving out his sentence at a federal jail in Brooklyn, pending his appeal of his conviction to the Second Circuit Court of Appeal.

Singh started at both Alameda and FTX as a software engineer. He said at trial that he pleaded guilty because he had “implicitly and explicitly greenlit transactions I knew must have been digging a little deeper, and therefore coming from customer funds.”

He was eventually made aware of an enormous $8 billion “hole” in “funds that FTX should have had on hand to supply customer withdrawal,” he testified, saying that FTX’s spending around the time of the massive deficit in deposit funds included “real estate investments, VC investment, campaign donations and speculative bets and trading.”

Before the bankruptcy and collapse of FTX, Bankman-Fried was lauded as one of the most prominent evangelists of the philanthropic social philosophy known as “effective altruism,” which promotes prioritizing donations to projects that will have the largest impact on the most people. Without expressly stating that Bankman-Fried’s reckless spending would have been at odds with the guiding principles of effective altruism, Singh testified that he viewed FTX’s expensive celebrity endorsement deals, as “value extractive,” and worried that partnering with them “would be really toxic to Alameda and FTX culture.”

Singh’s early cooperation with prosecutors notified them of an additional campaign donation conspiracy that they were previously unaware of: a straw donor scheme in which Bankman-Fried and former FTX co-chief executive officer Ryan Salame flooded both Democrat and Republican campaigns with tens of millions of dollars in illegal contributions.

Salame pleaded guilty in September 2023 and was later sentenced to 7.5 years in prison for his role in the campaign finance conspiracy.

Gary Wang, a third former FTX executive who cooperated with prosecutors and testified at trial against Bankman-Fried, is scheduled to be sentenced on Nov. 20.

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