What we learned from Nishad Singh’s testimony in the SBF trial
What we learned from Nishad Singh’s testimony in the SBF trial
The fraud trial of Sam Bankman-Fried, co-founder of bankrupt cryptocurrency exchange FTX and trading firm Alameda Research, continues in New York. Bankman-Fried is facing seven counts of fraud and conspiracy, including wire fraud and money laundering. Prosecutors say Bankman-Fried misused consumers’ money — as much as $10 billion.
Nishad Singh, the third and final government star witness, took the stand this week. Singh was the head of engineering at FTX. He has pleaded guilty to fraud and is cooperating with the authorities.
David Yaffe-Bellany, a New York Times technology and crypto industry reporter, was in the room for the testimony and talked with Marketplace’s Sabri Ben-Achour from outside the courthouse.
Sabri Ben-Achour: Did anything come out of Nishad Singh’s testimony that we previously did not know?
David Yaffe-Bellany: There are a lot of new interesting details that came out of Nishad’s testimony. I mean, he talked a bit about the political contribution side of Sam Bankman-Fried’s empire. And Nishad talked in a lot of detail about how that worked. He described a situation where Sam’s younger brother basically sent him a stack of blank checks that he signed, which the younger brother then sort of used to make contributions to various people. And Nishad also talked in detail about Sam Bankman-Fried’s kind of lavish spending at FTX — the way that, you know, he would pay for endorsements from celebrities or invest huge amounts of money in crypto companies without doing much due diligence, that sort of thing.
Ben-Achour: And that’s kind of what this case is all about fundamentally, right? Just using money from customers for things he should not be using it for.
Yaffe-Bellany: Yeah, absolutely. It’s that he was treating customer accounts essentially as a piggy bank, taking this money and spending it on sort of all manner of kind of lavish extravagant spending, you know — from political contributions to venture investments to charitable donations.
Ben-Achour: Singh talked about something called K5, which is an investment firm that connected Sam Bankman-Fried to celebrities. What role did K5 play in the rise and fall of FTX?
Yaffe-Bellany: So K5 has a really interesting story. It’s run by a former Hollywood agent named Michael Kives, who is super connected to celebrities. Sam, he went to a Super Bowl party at Kives’ house and he was sort of bowled over by the number of famous people there. And Sam immediately decided, you know, this could be incredibly useful for FTX. And he invested in Kives’ venture capital company K5 on really sort of generous terms for the company. And this is one of those investments that raise a lot of red flags internally at FTX.
Ben-Achour: Right. I was gonna ask: You know, overall, how is this trial looking for for Mr. Bankman-Fried?
Yaffe-Bellany: Things are not looking good. You know, a series of witnesses have given sort of quite damning testimony that the defense hasn’t really succeeded in poking major holes in. But you know, we’ll see what happens if he takes the stand. I mean, that can really change the dynamic of the trial. You know, suddenly, it’s not whether the jury sort of believes that the prosecutors have gathered enough evidence to meet their burden. It’s, ‘Do I believe this guy who’s staring me in the face and telling you that he’s innocent?’
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