The US Securities & Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have charged former FTX director of engineering Nishad Singh with fraud. This follows his Tuesday guilty plea to similar charges in a federal court.

The SEC and CFTC accuse FTX of lying to the public about the degree of separation between it and Alameda Research, the prop trading shop founded by FTX's Sam Bankman-Fried. They allege that the companies commingled corporate and customer funds, using them for their own investments and trading activities.

The SEC alleges that Singh moved funds around at Bankman-Fried's request to make FTX appear to have earned more revenue than it really did in 2021. And the CFTC complaint claims that Singh shifted $8 billion in Alameda liabilities to a customer account to “prevent Alameda from paying interest on its large outstanding balance.”

The SEC and CFTC further allege that Singh was part of a group that workshopped Bankman-Fried's tweets claiming FTX was Ok and its customers could be made whole just prior to FTX's filing for bankruptcy protection in November.

In a statement, SEC Director of Enforcement Gurbir Grewal said, “We allege that this was fraud, pure and simple.” And CFTC Chief Counsel and Deputy Enforcement Director Gretchen Lowe added that “Today’s filing reflects the CFTC’s commitment to protecting the US digital commodity markets.”

Key Points

  • The SEC & CFTC have charged former FTX director of engineering Nishad Singh with fraud.
  • The SEC & CFTC allege that FTX lied to the public about the degree of separation between it & Alameda Research.
  • The SEC claims that Singh moved funds around to make FTX appear to have earned more revenue than it really did.
  • The CFTC complaint claims that Singh shifted $8 billion in Alameda liabilities to a customer account.

TL;DR

The SEC & CFTC have charged former FTX director of engineering Nishad Singh with fraud allegations, citing claims that FTX lied to the public and commingled corporate and customer funds to be used for their own investments and trading activities.