The former head of engineering at the now-bankrupt crypto exchange FTX, Nishad Singh, pleaded guilty on Tuesday to charges leveled against him.
Singh joins Alameda Research ex-CEO Caroline Ellison and FTX co-founder Gary Wang, who both pleaded guilty to charges and promised to cooperate with the authorities investigating FTX.
According to Singh’s lawyer, the former FTX executive agreed to plead guilty to charges after meeting with US prosecutors last month to discuss a possible cooperation agreement.
Singh pleaded guilty to money laundering, wire fraud, and violation of campaign finance laws. The FTX ex-employee said he was aware of the customer funds mismanagement at the exchange by June 2022 and apologized for his involvement.
SEC Explains Singh’s Role in Mismanaging FTX Customer Funds
The Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) were the two regulators that brought criminal charges against Singh.
At the time, Gurbir Grewal, the SEC Director of Enforcement, disclosed that Singh was involved in creating a software code that allowed FTX users’ money to be stolen.
Grewal explained that the software code created an undisclosed feature on the FTX platform, which permitted Alameda Research to divert client funds.
This feature allegedly allowed Alameda Research to obtain a negative balance on its account with FTX and exclude the trading firm from being liquidated when it fell below the specified margin level on trades. No other FTX customer had this feature.
Bankman-Fried and His Charges
Meanwhile, Bankman-Fried has yet to plead not guilty to charges against him. The Disgraced former billionaire is facing eight charges ranging from wire fraud to money laundering.
Regulators accused Bankman-Fried of misappropriating customer funds to open trades at his trading company Alameda Research, donate to politicians, and acquire private real estate.
On top of those charges, Federal prosecutors filed a new lawsuit last week against the FTX founder, accusing him of making more than 250 illegal political donations in the US in an attempt to buy influence over crypto regulation.
Last December, US Attorney urged everyone involved in the illegal activities at Alameda Research or FTX to come forward before authorities go after them.
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