The former cryptocurrency executive Nishad Singh, who once shared a $35m Bahamas penthouse with the FTX founder, Sam Bankman-Fried, was spared prison time by a judge on Wednesday for his role in the theft by his imprisoned former boss of about $8bn in customer funds from the now bankrupt exchange.
The United States district judge Lewis Kaplan imposed the sentence during a hearing in Manhattan federal court.
Singh, who had pleaded guilty to six felony counts of fraud and conspiracy, testified last year as a prosecution witness in the trial that led to Bankman-Fried’s conviction on fraud and other charges. Singh, in a plea deal with prosecutors, admitted to his role in what they have called one of the biggest financial frauds in US history and for acting as a “straw donor” in some of Bankman-Fried’s millions of dollars in political donations.
Prosecutors had urged leniency for the 29-year-old Singh, FTX’s former chief engineer, while his lawyers had recommended that he serve no prison time.
Bankman-Fried, 32, is serving a 25-year prison sentence at the Metropolitan detention center in Brooklyn stemming from FTX’s November 2022 collapse.
During the hearing, Singh told the judge he regretted his actions. Singh said he looked up to and supported Bankman-Fried even after coming to see him as deceptive and self-serving.
“I am overwhelmed with remorse for the harm that I participated in and that I caused to so many innocent people,” Singh said. “I strayed so far from my values.”
“I still have an enormous debt to society,” Singh added.
“You did the right thing,” Kaplan told Singh. “You immediately and truthfully, as far as I can see, fully unburdened yourself to the government about wrongdoing about which you were aware and which they quite clearly were not.“
The prosecutor Nicolas Roos told the judge that Singh deserved credit for coming forward and implicating himself by describing conversations that were not otherwise documented.
“It could have been very easy for Mr Singh to have denied everything,” Roos said.
“He wanted to right a wrong or at least start to make that effort and do the right thing,” Roos added.
Kaplan last month sentenced Caroline Ellison, Bankman-Fried’s former girlfriend and an executive at FTX’s sister hedge fund Alameda Research, to two years in prison. The judge praised her cooperation, but said that such assistance could not be a “get-out-of-jail-free card” in a case as serious as this one.
The judge told Singh that his involvement “was much more limited than, certainly, Bankman-Fried and Ellison”.
Singh’s lawyer Andrew Goldstein told the judge that nearly all of the billions of dollars in customer funds were stolen before his client learned of the scheme.
“The overwhelming majority of the conduct that made it such a monumental crime took place before Nishad ever became involved,” Goldstein said, arguing that Bankman-Fried and Ellison were responsible for the decision to steal funds from FTX customers to pay Alameda’s lenders. “That was their crime. It was not Nishad’s crime.”
Goldstein said Singh’s brother, parents and fiancee, among other family members, were present in court.
A 2017 graduate of the University of California, Berkeley, Singh lived with Bankman-Fried and seven other employees of FTX and its sister firm Alameda Research in a waterfront penthouse in the Bahamas, where the exchange was based.
Singh said he owned an equity stake of about 6-7% in FTX. He said that made him a billionaire on paper during the Covid-19 pandemic when there was boom in cryptocurrency prices. By October 2021, Bankman-Fried was worth $26 bn, according to Forbes magazine, and gained prominence as a prolific donor to philanthropic causes and Democratic politicians.
