In September 2022, when he found out that Alameda had been using FTX customer funds, Nishad Singh said he asked to speak with the founder of Alameda and the CEO of FTX. They were both, of course, Sam Bankman-Fried. Singh and Bankman-Fried met on the balcony of the penthouse they shared in the Bahamas, which was spacious enough to include a pool, around 8PM or 9PM local time. As Bankman-Fried sprawled in a white chaise lounge, Singh paced anxiously.\u00a0<\/p>\n<\/div>\n
\u201cI\u2019m not sure what there is to worry about,\u201d Bankman-Fried told Singh, according to Singh\u2019s court testimony today.<\/p>\n<\/div>\n
What about the $13 billion Alameda owed to FTX, Singh wanted to know.<\/p>\n<\/div>\n
\u201cRight, that,\u201d Bankman-Fried replied in Singh\u2019s retelling. \u201cWe are a little short on deliverable.\u201d\u00a0<\/p>\n<\/div>\n
How short? Well, they could pay back $5 billion of the money \u2014 a cool $8 billion less than they owed.<\/p>\n<\/div>\n
\u201cI felt really betrayed.\u201d<\/p>\n<\/div>\n<\/div>\n
To really set the scene as Singh testified, prosecutor Nicolas Roos pulled up a photo of the balcony in question. Barbara Fried, the defendant\u2019s mother, appeared incredulous as the luxury balcony appeared on the screen. As Singh told the story of the conversation, Fried appeared agitated, occasionally glancing in the direction of her son.<\/p>\n<\/div>\n
Asked how he felt about discovering the hole in the balance sheet, \u201cI was blindsided and horrified,\u201d Singh said. \u201cI felt really betrayed.\u201d But he felt he couldn\u2019t leave.\u00a0He wouldn\u2019t be able to live with himself if his departure meant that FTX fell, and the fall was avoidable. Bankman-Fried had told Singh he was indispensable.<\/p>\n<\/div>\n
Like Gary Wang before him, Singh had briefly been a paper billionaire \u2014 he owned \u201c6 or 7\u201d percent of FTX. He got a salary of $200,000, and equity in FTX in lieu of bonuses from 2020 on; before that, his bonuses had been as much as $1 million. He was also a long-time friend of Bankman-Fried\u2019s younger brother, Gabe, and had known the defendant since high school. In a black suit and red tie, Singh looked much younger than his years, like a member of a high school mock trial team. When he stepped down from the stand as we took a break for lunch, he took a hit from an asthma inhaler.<\/p>\n<\/div>\n
Singh has pleaded guilty to six felonies. He says his co-conspirators in committing these crimes were FTX executives Ryan Salame and Gary Wong, Bankman-Fried, and Alameda CEO Caroline Ellison. All of them have pleaded guilty to assorted crimes as well \u2014\u00a0except Bankman-Fried.<\/p>\n<\/div>\n
\u201cI\u2019ve always been intimidated by Sam.\u201d<\/p>\n<\/div>\n<\/div>\n
\u201cI\u2019ve always been intimidated by Sam,\u201d he said. (The defense objected to this, and it was overruled.) Singh said that Bankman-Fried was a \u201cformidable character, brilliant.\u201d Singh also called the actions he and his co-conspirators took \u201cevil.\u201d<\/p>\n<\/div>\n
Singh was late to the conspiracy, and didn\u2019t find out about it until September 2022. But even before that, he was \u201cembarrassed and ashamed\u201d about Bankman-Fried\u2019s \u201cexcessive\u201d approach to spending. Though he\u2019d complained to Bankman-Fried, he was told that the real problem was \u201cpeople like me sowing seeds of doubt in the company decisions.\u201d That comment was made in front of other people in the office, which Singh found \u201cpretty humiliating.\u201d<\/p>\n<\/div>\n
That was the introduction to how Bankman-Fried splashed his cash around. One of the investments was Genesis Digital Assets, a Bitcoin mining company. The idea of Bitcoin mining perplexed Judge Lewis Kaplan, who inquired about an explanation. (It was one of several times this would occur with jargon Singh used in his testimony.) Singh explained that these were banks of computers solving puzzles in order to get a reward and add a block of transactions to the blockchain.<\/p>\n<\/div>\n
Kaplan sighed. \u201cWell, I\u2019m sure that\u2019s the best I\u2019m going to get.\u201d The courtroom laughed.<\/p>\n<\/div>\n
\u201cKendall and Kris Jenner, I honestly could not tell you what they do.\u201d<\/p>\n<\/div>\n<\/div>\n
There was also a discussion of K5 Ventures, a venture capital firm run by Michael Kives. We saw a memo in which Bankman-Fried said Kives was \u201cprobably, the most connected person I\u2019ve ever met\u201d and described a dinner with guests such as Hillary Clinton, Doug Emhoff, Katy Perry, Orlando Bloom, Leonardo DiCaprio, Jeff Bezos, Ted Sarandos, Kendall Jenner, Kris Jenner, and Corey Gamble. Singh read the names aloud and briefly described what each did \u2014\u00a0though he didn\u2019t recognize Sarandos or Gamble.<\/p>\n<\/div>\n
\u201cKendall and Kris Jenner, I honestly could not tell you what they do,\u201d he said, inspiring another wave of laughter. It had been a funnier day in court than most.<\/p>\n<\/div>\n
Bankman-Fried saw K5 as a \u201cone-stop shop\u201d for relationships, and wanted to commit up to $1 billion of capital to the firm in the long-term, something Singh objected to. Singh felt the firm was \u201ctoxic to FTX and Alameda culture,\u201d but Alameda Research Ventures invested anyway.<\/p>\n<\/div>\n
We then saw a spreadsheet of endorsement deals, including those for Steph Curry, Tom Brady, Gisele Bundchen, the FTX Arena, and Larry David. In total, Bankman-Fried\u2019s entities spent $1.13 billion on endorsement deals.<\/p>\n<\/div>\n
\u201cSam\u2019s a fan of views.\u201d<\/p>\n<\/div>\n<\/div>\n
Singh\u2019s testimony painted Bankman-Fried as very loose with money \u2014\u00a0investing broadly in real estate as well. We saw a spreadsheet of the properties FTX had leased and purchased, including both of Bankman-Fried\u2019s apartments and the one his parents lived in. (At this point, Joe Bankman and Barbara Fried switched legal pads, apparently their way of passing notes.) As for the penthouse, Singh didn\u2019t want it, and neither did some other members of the group. But \u201cSam really liked this one,\u201d he said. \u201cSam\u2019s a fan of views.\u201d Finally, Bankman-Fried told his prospective roommates that he\u2019d pay them $100 million to make the drama go away, which Singh took as a signal to shut up.<\/p>\n<\/div>\n
Even before he knew about Alameda\u2019s special access to FTX, Singh had been involved in other shady transactions. For instance, in December 2021, Singh created some back-dated transactions that pushed FTX\u2019s revenue \u201cover the line\u201d to $1 billion. He did that by changing the rules around the staking of a token, Serum, such that FTX got 25 percent of the rewards. This information was provided to auditors, he testified.<\/p>\n<\/div>\n