SEC and CFTC Charge FTX’s Nishad Singh

by Arthur · March 1, 2023

Table of Contents

Important takeaways

Former FTX chief engineer Nishad Singh yesterday pleaded guilty to six criminal charges.
The CFTC and SEC have filed civil lawsuits against him.
The regulators are seeking civil monetary penalties, and to ban Singh from trading commodities and securities again.

FTX’s chief engineer, Nishad Singh, was hit with lawsuits from both the SEC and CFTC shortly after pleading guilty to six criminal charges yesterday.

Contribute to fraud

Another of Sam Bankman-Fried’s lieutenants faces civil lawsuits.

Yesterday both The Security and Exchange Commission and Commodity Futures Trading Commission filed complaints against former FTX chief engineer Nishad Singh.

The CFTC charged Singh with fraud and with aiding and abetting the fraud perpetrated by FTX, Alameda Research and Sam Bankman-Fried. Among other things, the regulatory body is seeking civil monetary penalties, restitution of funds and to prohibit Singh from ever being involved in the transaction of commodity interests or “digital assets” again.

“Today’s filing reflects the CFTC’s commitment to protecting the U.S. digital commodity markets,” said CFTC Chief Counsel Gretchen Lowe. “Today’s filing also includes an admission of liability by an individual who, as charged, engaged in and aided and abetted significant violations of the Commodity Exchange Act and CFTC regulations.”

The SEC, in turn, charged Singh with violating the Securities Act and the Exchange Act by enabling Bankman-Fried to move FTX funds illegally. The agency is also seeking civil monetary penalties and to ban Singh from trading securities – including “crypto-asset securities”.

“We allege this was fraud, plain and simple,” said SEC Chief of Enforcement Gurbir Grewal. “While FTX on the one hand presented its supposedly effective risk mitigation measures to investors, Mr. Singh and his co-defendants stole client funds using the software code that Mr. Singh helped create.”

Singh pleaded guilty yesterday to one count of wire fraud, three counts of conspiracy to commit fraud, one count of conspiracy to commit money laundering and one count of conspiracy to defraud the United States by violating campaign finance laws.

Disclaimer: At the time of writing, the author of this piece owned BTC, ETH and several other crypto assets.

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