Compile - Odaily
Organize - jk
On Monday, October 16, local time in the United States, the SBF case entered its second week in court. Nishad Singh, the former chief of engineering at FTX, the director who manages all software engineering, testified in court. As the third star witness in this case, his testimony related more to the inside story of FTX, including political donations, misappropriation of funds and other scandals.
Odaily adds the following summary:
Sam Bankman-Fried (SBF), the former actual controller of the FTX exchange, is involved in a major legal dispute. In a recent court session, a series of witnesses,Includes FTX co-founder and CTO Gary Wang and former Alameda Research executive Caroline Ellison, provided testimony about the inner workings of FTX and Alameda Research. They uncovered possible illegal activity and misconduct, including allegations that FTX client funds were misappropriated at the direction of SBF and Alameda submitted false financial statements. SBF may have used its position at the two companies to engage in opaque and irregular financial transactions involving billions of dollars, according to testimony.
Gary Wang and Caroline Ellison detailed a complex series of transactions and decision-making processes in which FTX customer funds were allegedly improperly used to pay Alameda’s debts and expenses. Additionally, they point to SBFs personal relationships with other executives and employees, including its relationship with Ellison, as potentially playing a role in those decisions.During the trial on the sixth day, star witness Caroline Ellison detailed how SBF operated FTX in several aspects including Alameda’s misappropriation of FTX customer funds, Alameda’s false financial statements, CZ’s Twitter response, etc. illegal, also mentioned her new boyfriend and income on the seventh day. As the trial entered its second week, the last star witness in the case, Nishad Singh, who is also the chief of the engineering team in the SBF coterie, began to testify in court. On the first day, the prosecution lawyer asked questions.
For more details, see SBF Trial Witnesses: An article summarizing the testimony of key witnesses》《SBF Trial Day 6: Ex-girlfriend Caroline Ellison’s explosive testimony collection》。
(Note: In the trial transcript, the defendant is represented by Sam Bankman-Fried, and AUSA is represented by the Assistant U.S. Attorney.)
Overview
AUSA (Assistant United States Attorney): Where did you work last year?
Nishad Singh: FTX. Im the chief engineer.
AUSA: Have you ever committed a crime?
Singh: Fraud... and campaign finance violations.
AUSA: Who did you conspire with?
Singh: Sam Bankman-Fried, Caroline Ellison, Gary Wang and others.
AUSA: When did you first meet Bankman-Fried?
Singh: His brother Dave and I are close friends.
AUSA: What university did you attend?
Singh: UC Berkeley, then Facebook. In late 2017, I started working at Alameda Research. Sam and Gary are running it.
AUSA: What is your role at Alameda?
Singh: I am a software engineer.
AUSA: Have you met Caroline Ellison?
Singh: Yes, she is a trader. Then I went to FTX. Sam and Gary manage.
AUSA: What did Bankman-Fried do that Gary didnt do?
Singh: Endorsement deals.
AUSA: Was Gary involved in venture capital?
Singh: I dont think so. Thats Sam.
AUSA: Did you ever live with the defendant?
Singh: Yeah, the penthouse in Albany.
AUSA: Where?
Singh: In the Bahamas.
AUSA: How would you describe your relationship with Sam?
Singh: I have been threatened...
SFBs lawyer: Objection!
Judge Kaplan: On what grounds?
SBFs lawyer: This uses speculation.
Judge Kaplan: Dismissed.
Singh: Sam is such a formidable character that I started to distrust him.
AUSA: How much are you worth?
Singh: Im a billionaire.
AUSA: Has the company ever given you a loan?
Singh: Yes.
AUSA: Did you make any large purchases using exchange money?
Singh: Yes. There are also donations.
AUSA: Who manages Alameda?
Singh: Trabucco and Caroline. But in the end, it was Sam Bankman-Fried.
AUSA: How did you know?
Singh: It says Alameda on one of his computer screens. SBF would use Alamedas money unilaterally. He told me he had threatened to fire Caroline.
How does Sam handle donations and sponsorships?
AUSA (Assistant United States Attorney): How would you describe the defendants spending pattern?
Singh: Excessive.
AUSA: Did you tell the defendant your side of the story?
Singh: I found out the cost after the fact, and I would complain.
Singh: I would complain about excess and showiness, which is contrary to what we built the company for. He would say I don’t understand, he is interacting with people. I think we were defrauded out of $20 million and he said I was sowing doubt.
AUSA: Let’s talk about K5(Odaily note: an evidence code). What did the defendant say?
Singh: Its important that they have connections with celebrities.
Singh: Sam told me that he met the most impressive person hed ever met at Michael Kives house after a Super Bowl party in LA.
AUSA: Who else is on the participating list?
Singh: Hillary Clinton, she was a presidential candidate.
SBFs Counsel: Agreed.
Singh: The list of attendees at the Super Bowl party that Sam mentioned also included Orlando Bloom, Kate Hudson, Kamala Harris husband, Leonardo DiCaprio.
AUSA: Let me show you a spreadsheet of FTX trades. Have you seen FTX Arena?
Singh: Yes. $135 million. And $28 million for Steph Curry.
AUSA: Who is Steph Curry?
Singh: A great basketball player.
(Odaily note: The list also includes Kevin OLeary, $14 million.)
AUSA: And Tom Brady and Gisele Bundchen?
Singh: A quarterback and a model.
AUSA: What about Larry David?
Singh: From Seinfeld…
AUSA: How much do all these deals add up to?
Singh: $1.3 billion.
Judge Kaplan: Lets take a break.
AUSA (Assistant United States Attorney): Did you tell the defendant about the purchase of the penthouse?
Singh: I told him it was too flashy. He said he would spend $100 million to fix the problem.
AUSA: In June 2022, were you involved in a project involving the Alameda balance?
Singh: Yes.
AUSA: You mentioned a bug. Can you explain it?
Singh: This bug caused fiat currencies in FTX accounts to not be accounted for correctly - the error increased to $8 billion... I overheard a conversation between Gary and Adam Yedidia about this issue.
AUSA: How is it possible for Alameda to have this negative balance?
Singh: Yes"Allow Negative"Function.
Judge Kaplan: Explain what this function is.
Singh: Its a yes or no option. This way, it allows for negative balances.
AUSA: When you help create"Allow Negative"How do you understand the function?
Singh: This is to give FTX back the ability to get the locked form of FTT. Sam and Gary told me this the day I was coding.
AUSA: So in June 2022, when you saw Alameda had a negative balance of $2.8 billion, what did you think?
Singh: Im worried.
AUSA: Do you understand whether it is appropriate to use client funds?
Singh: This is inappropriate.
AUSA (Assistant United States Attorney) Roos: Do you remember being involved in discussions about possibly closing Alameda?
Singh: Yes. Sam sent Gary and me a Google Doc. I read most of it, but not all.
Singh: I propose to shut down Alameda on FTX - close some illiquid markets, restructure the OTC system...
AUSA: By 2022, will Alameda need"Allow Negative"Function to do market making?
Singh: Fundamentally, no.
AUSA: Did you ask Caroline Ellison about the possibility of Alameda closing on FTX?
Singh: Yes. She replied that that was impossible.
AUSA: How did you respond?
Singh: I was shocked.
AUSA: Who is in the chat?
Singh: Gary, Sam, Caroline and me.
Singh: Gary said Alameda borrowed $13 billion from FTX. I hope I heard wrong. FTX itself doesn’t have that much money.
AUSA: How did the defendant respond?
Singh: I sat next to him. He didnt look surprised. He made a false excuse to escape.
AUSA: Where did you speak to the defendant?
Singh: On the balcony of the penthouse. I know this needs to be very private.
AUSA: Day or night?
Singh: At night.
AUSA: How long did your conversation with the defendant last on the balcony?
Singh: An hour, an hour and a half. I said that Caroline was concerned about the situation at NAV. Sam said, Were a little short on deliverables.
Singh: Sam said, Im worried about this. Maybe I shouldnt have circulated this document this morning. People are going to be scared... I feel betrayed that Ive put five years of blood and tears into this and its turned out so badly.
AUSA: Why didnt you leave?
Singh: How can I forgive myself if my leaving leads to the end? On the balcony, Sam says hell go to New York first with Remnik and then with Scaramucci.
AUSA: Who is Scaramucci?
Singh: I think his name was Anthony. He was on staff with Trump.
AUSA (Assistant United States Attorney): What about his Skybridge Capital?
Singh: That was Anthony Scaramuccis company.
AUSA: Was this September after your conversation?
Singh: Yeah... In this case, Sam, Gary and I were supposed to take the loan and hand it over to FTX US, just on paper.
Singh: I have some political donations to my name and the money came from Alameda.
AUSA: What are you involved in most of the time?
Singh: Very few. I try to stay as uninvolved as possible. There is a Signal chat called Donations Processing.
Singh: Sam Leave it to his brother Gabriel to do this. Ryan Salame has access to my account. My job is to click the button.
AUSA: Who is Ryan Salame?
Singh: He handles fiat currency trading. He would log into my Prime Trust account and donate to candidates or super PACs. Then he would contact me.
On screen: Keenan Lantz asked Salams to take $20,000 from Singhs bank account and donate it to the Delaware Democratic Party.
AUSA: Who is Keenan Lantz?
Singh: He works for Gabe Bankman-Fried’s GAP.
AUSA: What is that?
Singh: Guarding Against Pandemics.
Singh: Then they used my Wells Fargo account. They asked me if they could use my name to donate to multiple Democratic candidates. I agreed.
Judge Kaplan: What is At Blue?
Singh: A platform to donate to the Democratic Party. I was supposed to be writing a lot of checks.
AUSA: Where do these funds come from?
Singh: Alameda sent me FTX client funds.
AUSA: Why donate in your name?
Singh: It’s for image. The final recipient knows the money actually came from someone else.
AUSA: Your agreement, 3501-2 - what is the maximum sentence you face?
Singh: 75 years. I hope not to go to jail.
AUSA: What is your mental state?
Singh: I had suicidal thoughts for a few days.
AUSA: No more questions.
The defense inquiry will begin tomorrow and Odaily will continue to follow the coverage.
