According to people familiar with the matter, Nishad Singh is looking to make a cooperation deal due to which he had a meeting with US federal prosecutors.
He was part of the now-collapsed FTX empire and served as the head of engineering. This makes him the third member of the inner circle of Sam Bankman-Fried to seek some leniency in the fraud case.
The people
Gary Wang, the co-founder of FTX, and the ex-CEO of Alameda Research, Caroline Ellison, were two of the closest former allies of Sam Bank-Fried.
Both of them have already pled guilty to the charges of fraud and are now cooperating in the case with the Southern District of New York.
So far, no accusations have been made against Singh in the said case, but reports indicate that he had had a meeting with prosecutors last week in the US Attorney’s Office of the Southern District of New York in a profiler session.
A profiler session typically encourages interviewees to talk freely, since it comes with the offer of limited immunity.
However, it does not automatically imply a cooperation deal because prosecutors first weigh the value of the information shared.
FTX finances
The former roommate of Sam Bankman-Fried in the Bahamas, Singh had also been a major donor in the election campaigns of Democrats.
Therefore, there is a possibility that he could share a great deal of insight into FTX’s campaign finances. He has donated a total of $9.3 million since 2020 to Democratic committees and candidates.
A political action committee called Mind The Gap was the largest recipient, which was founded last year by Barbara Fried, Sam Bankman-Fried’s mother, and received a donation of $1 million.
Bankruptcy court documents also show that Singh had also received loans from Alameda Research worth $543 million.
Political donations
In the months before the FTX crypto exchange imploded, political donations worth $46.5 million had been made by Sam Bankman-Fried.
OpenSecrets.org shared a public spreadsheet tracking US campaign lobbying and finance, which showed that most of the donations were made to Democratic candidates.
A number of political action committees also received donations worth $41 million from FTX. These organizations are permitted to accept unlimited corporate and individual donations.
But, they have to remain separate from campaigns formally because they can run ads opposing or supporting candidates.
The new management team of FTX, which is led by new CEO John J. Ray III, had begun the process last month of getting back the political donations made by the company and its former officials.
As a matter of fact, FTX went as far as warning that if there are no voluntary returns of the political donations, then it would seek the assistance of the Bankruptcy Court for getting such payments back.
Considering that customer funds of about $1 billion seem to be missing, the demand for the return of political donations does not really come as a surprise.
Customers would obviously want to have their funds back and this is just one way of going about it.
Editorial credit: Poetra.RH / shutterstock.com
