Blockchain & Crypto

Former Head of FTX’s Engineering Division Nears Plea Deal

The former head of the engineering department of the collapsed FTX cryptocurrency exchange is close to concluding a plea deal with federal prosecutors.

Former Head of FTX's Engineering Division Nears Plea Deal

Source: Pixabay.com

If this deal is concluded, a criminal case against the founder of FTX Sam Bankman-Freed will be significantly strengthened from a legal point of view.

Nishad Singh, who worked on the FTX-affiliated Alameda trading platform and then at FTX itself, will become the third high-ranking employee to decide to cooperate with the government. Former Alameda CEO Caroline Ellison and FTX co-founder Gary Wang pleaded guilty to multiple counts in December.

Caroline Ellison and Gary Wang are expected to testify at the upcoming trial against Sam Bankman-Fried. Currently, the founder of the crypto exchange is involved in eight criminal cases. If proven guilty, he can spend the rest of his life in one of the US prisons. Sam Bankman-Fried denies the fact of his guilt and does not believe that imprisonment in his case is a reasonable and fair decision.

FTX, which was worth $32 billion at the best of times, went bankrupt last November. This happened after the crypto exchange was unable to meet the numerous demands of customers for the withdrawal of funds.

Prosecutors are convinced that the FTX bankruptcy, which affected more than 1 million potential creditors, is one of the largest financial frauds in the history of the United States, and not a natural process due to objective realities.

At a closed hearing in December, a few hours before Sam Bankman-Fried was extradited from the Bahamas to New York, Caroline Ellison told a U.S. federal judge that from 2019 to 2022, Alameda had access to an unlimited credit line on FTX.com. She also told prosecutors that Sam Bankman-Fried preferred to communicate using ephemeral and encrypted platforms to limit the amount of evidence in potential future trials.

The government used this testimony to explain the tightening of bail conditions that could prevent the FTX founder from using the Internet and certain devices.

Nishad Singh, a school friend of Sam Bankman’s younger brother, Freed, worked as a software engineer at Facebook before joining Alameda in 2017. In January, FTX tried to subpoena him along with several members of the crypto exchange founder’s inner circle as part of the bankruptcy procedure taking place in Delaware. The court granted this request.

Sam Bankman-Fried, who was released on bail and is staying at his parents’ home in Palo Alto, appeared in court in New York on February 16. This happened after the prosecutor’s office accused him of falsifying testimony for trying to contact Ryan Miller, the general counsel of FTX US. Lawyers for the former billionaire deny accusations that their client intended to influence the witness.

 

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.