Per a report from Bloomberg, the former FTX Chief  Engineering Officer, Nishad Singh, has pleaded guilty to charges filed against him. Singh is cooperating with the U.S. Securities and Exchange Commission (SEC) and will work in the case built against his former boss, Sam Bankman-Fried (SBF).

As Bitcoinist reported in December 2022, two members of SBF’s inner circle, Caroline Ellison, former CEO at Alameda Research, and Gary Wang, co-founder at FTX, pleaded guilty and are working with the SEC and U.S. authorities. Singh is the third executive to fold and join the investigation against SBF.

FTX Higher Up Knew Something Was Wrong For Months

According to the report, Singh pleaded guilty to a six-count indictment, including wire frauded, conspiracy to commit securities fraud, campaign finance law violation, and other charges. During a court hearing held today at the Manhattan federal court, the former FTX Chief Engineering said:

(I am) unbelievably sorry for my role in this and the harm it caused. I took actions to make it appear that FTX’s revenues were higher than they were and provided that information to auditors. I knew my conduct was wrong.

Singh also confessed that he knew about FTX’s precarious financial state and the loans provided to the company’s trading arm, Alameda Research. In that sense, the judge determined that the former executive “disregarded a substantial risk” by staying in the company, violating the law.

On the charges regarding campaign finance, where millions of dollars were transferred to U.S. politicians on behalf of SBF and his inner circle, Singh claims that he was unaware of the company using his name for these purposes.

As Bitcoinist also reported, the U.S. Southern District Court of New York released an indictment revealing an FTX scheme to increase his influence in Washington. In this strategy, SBF and others donated to high-ranking government officials for “their own gain.”

Fraud “Pure And Simple”

The SEC, the Commodities Futures Trading Commission (CFTC), and the U.S. Attorney’s Office for the Southern District of New York pressed charges against Singh as part of the agreement. The SEC claims that the former FTX Chief Engineering was behind the software code that allowed the crypto exchange to defraud its customers.

In public, SBF assured its customers and others that the company was taking appropriate steps to protect its funds. The SEC claims that these statements were misleading. Thus, Singh can be held accountable for “actively participating in the scheme to deceive” FTX’s investors.

In the exchange’s final moments, Singh took a $6 million loan for personal use, the SEC’s indictment claims. Gurbir Grewal, Director of the SEC’s Division of Enforcement, said:

We allege that this was fraud, pure and simple: while on the one hand FTX touted its supposed effective risk mitigation measures to investors, on the other Mr. Singh and his co-defendants were stealing customer funds using software code Mr. Singh helped create. A pillar of our securities laws is that when companies and their representatives decide to speak on an issue, they can’t lie to investors on matters that are core to their investment decisions.