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Sam Bankman-Fried and other FTX executives spent $8 billion worth of customer funds on real estate, venture capital investments, campaign donations, endorsement deals and even a sports stadium, according to testimony from former senior FTX executive Nishad Singh.<\/p>\n
Singh\u2019s testimony, which kicked off the third week of Bankman-Fried\u2019s trial, provides fresh details of exactly where that money went.<\/p>\n
Singh, who has already pled guilty to fraud, money laundering and violation of campaign finance laws, said Monday that he learned of the $8 billion hole in Alameda\u2019s accounting in June 2022, which was the result of an accounting bug.<\/p>\n
Singh\u2019s testimony helps corroborate the statements given by three previous prosecution witnesses, all of whom were in Bankman-Fried\u2019s inner circle: FTX CTO Gary Wang, Alameda CEO Caroline Ellison and FTX engineer Adam Yedidia<\/a>. While Wang and Ellison have pled guilty, each witness has pointed to Bankman-Fried as the orchestrator of fraud and money laundering.<\/p>\n Singh said that even after learning about the hole, \u201cimplicitly and explicitly, I green-lit transactions that I knew must have been digging the hole deeper and therefore coming from customer funds.\u201d<\/span><\/p>\n Singh went on to describe Bankman-Fried\u2019s spending as \u201cexcessive.\u201d He said that he often learned about large spends after the fact, and that his expressions of concern weren\u2019t taken seriously.<\/p>\n \u201cI also would express that I felt kind of embarrassed or ashamed of how much it all wreaked of excess and flashiness,\u201d said Singh. \u201cIt didn\u2019t align with what I thought we were building a company for.\u201d<\/p>\n Prosecutor Nicolas Roos and Singh went through spreadsheets detailing different ways Alameda spent the $8 billion in customer funds. Singh testified that Bankman-Fried was \u201cin general the one making the final decision on investments and investment team decisions as a whole.\u201d<\/p>\n In addition to going over a $1 billion on Genesis Digital Assets, a crypto mining firm in Kazakhstan, and $500 million on Anthropic, an AI company focused on safety, the prosecution focused on Alameda\u2019s $200 million investment into K5 Global, a venture firm led by investor Michael Kives who is known for his extensive network.<\/p>\n That network seemed to impress Bankman-Fried deeply. After attending a Super Bowl Party hosted by K5 in Los Angeles, the former crypto mogul told Singh that he had met \u201cthe most impressive collection of people he ever had in one location.\u201d Faces at the party included Hilary Clinton, Katy Perry, Orlando Bloom, Leonardo DiCaprio, Jeff Bezos, Kendall and Kris Jenner and Kate Hudson.<\/p>\n Bankman-Fried had proposed a term sheet to Singh and Wang one night that laid out hundreds of millions of dollars of onuses to Kives and Bryan Baum, co-founder and managing partner of K5. The sheet also proposed up to $1 billion long-term capital to give to the VC firm, according to Singh.<\/p>\n \u201cWe can get from them essentially infinite connections,\u201d wrote Bankman-Fried in a letter to FTX leadership that was shared at Monday\u2019s trial. \u201cI think that if we asked them to arrange a dinner with us, Elon, Obama, Rihanna and Zuckerberg in a month, they would probably succeed.\u201d<\/p>\n Singh said he expressed concern about partnering with K5 and giving them such substantial funds, which would be \u201creally toxic to FTX and Alameda culture.\u201d He said that \u201cpoliticking and social climbing was not going to be rewarded, and here we were rewarding people in exorbitant amounts.\u201d<\/p>\n The former FTX executive suggested that Bankman-Fried use his own money, not FTX\u2019s, to make some of these investments. Those protestations didn\u2019t yield results, according to the spreadsheet, which showed the K5 deal went through Alameda\u2019s venture arm.<\/p>\n Bankman-Fried also believed that endorsement deals and even \u201cunpaid partnerships with celebrities\u201d would help increase FTX\u2019s influence to propel its success, said Singh.<\/p>\n To that end, about $205 million of that $8 billion chunk was spent renaming the Miami Heat stadium to FTX Arena. Another $150 million was spent to endorse the MLB. Other items on a spreadsheet shown to the jury show FTX paid out $1.13 billion in exchange for endorsements from basketball player Steph Curry, video game developer Riot, Seinfeld writer Larry David to endorse FTX in a Super Bowl ad<\/a>, football star Tom Brady and model Giselle B\u00fcndchen, with whom FTX was coordinating on some philanthropic efforts, according to Singh.\u00a0 .<\/p>\n Singh\u2019s testimony also revealed a range of properties that had been purchased with the funds, including a $30 million penthouse in the Bahamas that Singh said was \u201ctoo ostentatious.\u201d<\/p>\nWhere the money went<\/strong><\/h2>\n