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FTX's former Chief Engineer Nishad Singh nears plea deal with Justice

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(Kitco News) - The U.S. Justice Department (DoJ) is close to adding another key witness to their team ahead of FTX founder Sam Bankman-Fried’s criminal trial in October. Nishad Singh, the exchange’s former Director of Engineering and the main architect for the Alameda Research, FTX, and FTX.US platforms, is nearing a plea deal with prosecutors, according to a Bloomberg report.

Singh has been in discussions with the DoJ since at least early January, when he met them for a ‘proffer session’ at the U.S. Attorney’s Office for the Southern District of New York. These sessions usually entail prosecutors granting limited immunity to the witness so they can share what they know about an ongoing case.

The fact that Singh is preparing to plead guilty to fraud indicates that prosecutors believe that his cooperation and testimony will be very valuable to their case, and they’re offering him an attractive deal, including leniency in return.

If he ends up cooperating, Singh should be in a position to answer some of the key questions that remain in the FTX saga. He was first hired to work at Alameda back in 2017, where he designed the trading tools that enabled them to become the preeminent hedge fund in the crypto space.

In 2019, he helped build the new FTX exchange together with co-founders Bankman-Fried and Wang, and he built the software platform as well as the interfaces between FTX and Alameda, including the so-called ‘back doors’ and exceptions which are a key area of focus for Justice, the SEC and the CFTC.

Singh also helped build the software for FTX.US in 2020, and his opaque role and projects within the supposedly independent U.S. exchange were highlighted by former FTX.US president Brett Harrison last month. Harrison said that before stepping down, he argued “for Gary Wang’s and Nishad Singh’s software development responsibilities to be formally identified and shared across a larger group,” among other key areas of contention.

Singh could also shed light on the campaign finance contributions and charitable activities of FTX and its high-level executives. He gave over $9 million to the Democratic party since 2020, including $8 million in the runup to the recent midterm elections, and $1 million to Mind The Gap, a political action committee founded by Bankman-Fried’s mother in April 2021.

Singh’s deal has yet to be finalized, according to the report, but it could resemble the plea deals that Alameda Research CEO Caroline Ellison and FTX cofounder Gary Wang struck with the Justice department in December. Both the Manhattan prosecutors’ office and Singh’s lawyer, Andrew D. Goldstein, declined to comment on reports of the plea deal.

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