Highlights:
- Singh’s lawyers seek leniency, citing his minor role in FTX’s collapse.
- Singh cooperated early, helping authorities prosecute other FTX leaders.
- Court to decide Singh’s sentence on October 30 amid wider crypto fraud fallout.
Nishad Singh has asked a federal judge not to send him to prison. The lawyers of the former FTX Director of Engineering have asked for mercy, saying that Singh played the least role in the collapse of the cryptocurrency exchange. Singh’s plea is being made while he waits to be sentenced, after previously admitting guilt to various criminal charges.
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Former FTX head of engineering, Nishad Singh, urged a Manhattan federal judge to exempt him from a prison sentence for his role in the fall of the cryptocurrency exchange platform.
What do you think..?#FTX #DeFi #Crypto #DEX pic.twitter.com/hoef0U23nE— BlockMatra (@BlockMatra) October 17, 2024
Singh’s lawyers emphasized that he acted responsibly after recognizing the company’s financial troubles. According to the filing, he quickly cooperated with investigators. His legal team submitted over 100 letters from friends, family, and colleagues testifying to his character.
Unlike other FTX executives facing charges, they portrayed him as an uncommonly selfless individual. Singh’s legal team has asked the court to think of his circumstances when the sentence is decided.
Legal Team Argues Singh’s Role Was Limited
Singh’s lawyers argued in their case that he had a negligible role in FTX’s operations, particularly during the period prior to the company’s collapse. According to them Singh only got involved with the conspiracy two months prior to FTX’s bankruptcy declaration.
By that time, they argued, the major decisions had already been made by FTX founder Sam Bankman-Fried and Alameda Research CEO Caroline Ellison. They instead hailed his quick cooperation with authorities, unlike those who continued to pitch misleading stories. Singh’s attorneys said his cooperation was crucial to helping investigators understand how FTX operated and file charges against Bankman-Fried and others.
In addition, Singh’s lawyers said his actions were different than those of the other executives because he took action on the situation promptly at the outset of the crisis. According to them, he moved away from certain misleading practices when customers attempted to withdraw funds from FTX, unlike those still making false statements to the public.
FTX Collapse and Its Key Players
In November 2022, FTX, one of the largest cryptocurrency exchanges, collapsed. It filed for bankruptcy after it was discovered that billions of dollars of customer funds were also missing. Multiple investigations have followed the collapse, with some uncovering a complex web of financial mismanagement.
The key player in the fraudulent scheme was Sam Bankman-Fried, founder of FTX. The court convicted Bankman-Fried of seven counts of fraud and conspiracy in March 2024. He was also handed 25 years in prison. His actions included using customer funds to prop up Alameda Research, the trading firm he co-founded, as well as transferring assets from others to his accounts.
Alameda was supposed to be a market maker, but it had direct access to FTX’s funds, which raised concerns about conflicts of interest. Caroline Ellison, CEO of Alameda Research, was among those also charged for her involvement in funds misuse. Despite pleading guilty, she got a two-year sentence largely for cooperating with the investigation. Another key figure was Ryan Salame, CEO of FTX Digital Markets.
Caroline Ellison, the former CEO of Alameda Research, has agreed to transfer nearly all of her remaining cash and assets to @FTX_Official Trading Ltd. as part of a settlement in a bankruptcy court lawsuit. pic.twitter.com/EyMtzu2ifb
— CryptoTvplus (@Cryptotvplus) October 9, 2024
Unlike Ellison, he declined to work with the investigators and was sentenced to 7.5 years in prison. Another FTX executive, Gary Wang, is also awaiting sentencing on November 20 after pleading guilty to similar charges.
Singh’s legal team cited such cases to show that differences exist between the way the two executives played out during the company’s collapse. Singh hopes the comparison will result in a lighter sentence. Singh’s sentencing will be determined by the court on October 30.
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