Former cryptocurrency executive Nishad Singh, who once shared a $35 million Bahamas penthouse with FTX founder Sam Bankman-Fried, was spared prison time by a judge on Wednesday for his role in the theft by his imprisoned former boss of about $8 billion in customer funds from the now-bankrupt exchange.
During a hearing in Manhattan federal court, US District Judge Lewis Kaplan imposed no prison time but ordered three years of supervised release. Kaplan credited Singh for cooperating with prosecutors and coming clean about his actions in what the judge said “may have been the greatest financial fraud in American history.”
Singh, who had pleaded guilty to six felony counts of fraud and conspiracy, testified last year as a prosecution witness in the trial that led to Bankman-Fried’s conviction on fraud and other charges. Singh in a plea deal with prosecutors admitted to his role in the fraud and to serving as a “straw donor” in some of Bankman-Fried’s millions of dollars in political donations.
“I am overwhelmed with remorse for the harm that I participated in and that I caused to so many innocent people,” Singh told the judge at the hearing. “I strayed so far from my values.”
Prosecutors had urged leniency for the 29-year-old Singh, FTX’s former chief engineer, in light of his cooperation. His defense lawyers had recommended he serve no prison time.
Bankman-Fried, 32, is serving a 25-year prison sentence imposed by Kaplan stemming from FTX’s November 2022 collapse.
Kaplan last month sentenced Caroline Ellison, Bankman-Fried’s former girlfriend and an executive at FTX’s sister hedge fund Alameda Research, to two years in prison. The judge also had praised her cooperation, but said that such assistance was not a “get out of jail free card” considering her role in a case this serious.
The judge told Singh that his involvement “was much more limited than, certainly, Bankman-Fried and Ellison.”
Gary Wang, a third former FTX executive who cooperated with prosecutors, is scheduled to be sentenced on Nov. 20.
During the hearing, Singh said he looked up to and supported Bankman-Fried even after coming to see him as deceptive and self-serving.
“I still have an enormous debt to society,” Singh added.
“You did the right thing,” Kaplan told Singh. “You immediately and truthfully – as far as I can see – fully unburdened yourself to the government about wrongdoing about which you were aware and which they quite clearly were not.”
Prosecutor Nicolas Roos told the judge that Singh deserved credit for coming forward and implicating himself by describing conversations that were not otherwise documented.
“It could have been very easy for Mr. Singh to have denied everything,” Roos said.
“He wanted to right a wrong, or at least start to make that effort, and do the right thing,” Roos added.
‘A monumental crime’
Singh’s lawyer Andrew Goldstein told the judge that nearly all of the billions of dollars in customer funds were stolen before his client learned of the scheme.
“The overwhelming majority of the conduct that made it such a monumental crime took place before Nishad ever became involved,” Goldstein said, arguing that Bankman-Fried and Ellison were responsible for the decision to steal funds from FTX customers to pay Alameda’s lenders. “That was their crime. It was not Nishad’s crime.”
Goldstein said Singh’s brother, parents and fiancée, among other family members, were present in court.
A 2017 graduate of the University of California, Berkeley, Singh lived with Bankman-Fried and seven other employees of FTX and its sister firm Alameda Research in a waterfront penthouse in the Bahamas, where the exchange was based.
Singh said he owned an equity stake of around 6-7% in FTX. He said that made him a billionaire on paper during a boom in cryptocurrency prices during the COVID pandemic.
By October 2021, Bankman-Fried was worth $26 billion, according to Forbes magazine, and gained prominence as a prolific donor to philanthropic causes and Democratic politicians.
Singh testified during the trial that he became suicidal as FTX unraveled amid a flurry of customer withdrawals. He returned to the United States shortly before the exchange declared bankruptcy on Nov. 12, 2022, and had his first meeting with federal prosecutors later that month.
Singh testified that he had confronted Bankman-Fried about a massive shortfall of customer funds during an hourlong conversation held in September 2022 on the balcony of their penthouse. Singh said Bankman-Fried assured him he would raise more funds and cut costs.
Bankman-Fried is appealing his conviction and sentence.