Former FTX engineering director Nishad Singh testified in a New York courtroom that ex-CEO Sam “SBF” Bankman-Fried often made unilateral decisions regarding purchases through Alameda Research, despite Singh’s belief that Bankman-Fried’s role was separate from FTX. Singh also claimed that Bankman-Fried would spend Alameda’s money without consulting others and even threatened to fire Caroline Ellison, who was leading Alameda. Singh expressed his dissatisfaction with the excessive spending and flashiness, which he felt contradicted the company’s goals. Singh’s testimony revealed a lack of trust in Bankman-Fried, describing him as a formidable character.
Singh further disclosed that Bankman-Fried instructed him and former CTO Gary Wang to proceed with investing $1 billion in K5 Global, a venture capital firm co-owned by Michael Kives and Bryan Baum. Singh emphasized his request to use Bankman-Fried’s money instead of FTX’s funds for the investment. Additionally, Singh mentioned Bankman-Fried’s involvement in investments in Anthropic, an artificial intelligence startup, and K5 Global.
The testimonies of Singh, Ellison, and Wang were presented during the ninth day of Bankman-Fried’s criminal trial, which commenced on October 3 in New York. Ellison, Wang, Singh, and former FTX Digital Markets co-CEO Ryan Salame had pleaded guilty to fraud charges related to the use of FTX funds by Alameda without user consent. Salame, however, is not expected to testify in the trial. The defense team’s decision to call Bankman-Fried as a witness remained uncertain.
Tareq Morad, an FTX user, also testified in the trial, providing insights into his understanding of how the crypto exchange planned to utilize his deposits and how Bankman-Fried’s statements influenced his investment decision. Morad mentioned that he believed Bankman-Fried’s tweet reassuring the public about the safety of FTX’s assets amid reports of withdrawal issues in November 2022.
Bankman-Fried’s trial is expected to continue until November, with another trial in March 2024 for similar charges. Bankman-Fried has pleaded not guilty to the 12 counts listed in his indictment. In court, Ellison, Wang, and Singh all admitted to committing crimes alongside Bankman-Fried. Ellison acknowledged providing fraudulent documents and making misleading statements regarding the use of FTX funds by Alameda, while Wang claimed that those in charge allowed Alameda to withdraw unlimited funds.
The credibility of crypto exchanges, particularly following the collapse of FTX, has come under scrutiny. The outcome of Bankman-Fried’s trial will play a significant role in shaping public perception and trust in these platforms.