LIVE: Former Top FTX Executive Nishad Singh Takes Stand in Case Against Sam Bankman-Fried

• A former senior FTX executive, Nishad Singh, who has already pleaded guilty, testified as the third week of Sam Bankman-Fried’s criminal trial began.

• Singh said he knew around $8 billion of FTX customers’ money had gone missing.

• “I had a lot of admiration and respect for him, but over time that eroded,” Singh said of Bankman-Fried, his friend from high school.

The third week of Sam-Bankman Fried’s criminal trial began with a former senior FTX executive testifying that he learned two months before the crypto exchange blew up that it was improperly using customers’ money.

Nishad Singh, who was head of engineering, said he “learned of a hole” in the company’s finances in September 2022. Though he noticed around $8 billion missing from Bankman-Fried’s company, he nevertheless approved transactions that he “implicitly” knew had to have come from user deposits, Singh told a court Monday.

The hole was “enormous,” Singh said, adding that he learned in conversations with Bankman-Fried that the funds were used by Alameda Research – Bankman-Fried’s affiliated trading firm – for a variety of venture investments, political donations, real estate purchases and other expenditures.

Prosecutors seemed intent on using Singh to paint Bankman-Fried as the one who ultimately directed FTX and Alameda’s investments. Singh testified that Bankman-Fried would frequently ignore objections from other team members and would make large investments designed to give his businesses entreé with celebrities, politicians and other people of influence.

One line of questioning zeroed in on a $200 million Alameda investment into K5 Global, a venture firm led by businessman Michael Kives. Singh said that Bankman-Fried attended a Kives-hosted Super Bowl party with Hillary Clinton, Jeff Bezos and Kendall Jenner, among others. Apparently impressed by the star power at the event, Bankman-Fired pitched the investment into Kives’ business as a way for FTX to earn “essentially infinite connections.”

Singh, however, said he expressed concern that the investment, which would put FTX in proximity to celebrities and professional athletes, would be “value-extractive” and “toxic to FTX culture.”

“If we must go through with this, it must not go through FTX,” Singh recalled telling Bankman-Fried. “It should be Sam’s money, not FTX money.” Singh said his protestations didn’t yield results. Prosecutors entered a spreadsheet into evidence listing FTX and Alameda’s various venture investments; the sheet showed that the nine-figure K5 deal went through Alameda’s venture arm, not Sam’s own pocket book.

Singh kicked off the third week of Bankman-Fried’s criminal trial as a key witness in the government’s case that the FTX founder committed an array of fraud and conspiracy charges. Like fellow former executives Caroline Ellison and Gary Wang, who have also testified in Bankman-Fried’s trial for fraud and conspiracy charges, Singh pleaded guilty to charges tied to the exchange’s operation and collapse.

Singh’s testimony early on Monday follows Tareq Morad, a former FTX customer who said he learned about FTX from headlines and his work lobbying Congress. He sent funds to North Dimension via wire transfer to fund his FTX account. He ultimately lost between $250,000 and $280,000 worth of deposits, he said.

Bankman-Fried’s high school friend

Boyish-looking and bespectacled, Singh recounted his experience climbing the ranks from software developer to manager at FTX, the crypto exchange founded by his high school friend, Bankman-Fried.

At the beginning of his tenure at the exchange, Singh testified, he felt “intimidated” by the “formidable” and “brilliant” wunderkind who helmed the platform he was helping build out. But, that admiration quickly turned to “shame” following the September 2022 discovery that FTX’s executives were enriching themselves with customers’ funds.

“I had a lot of admiration and respect for him, but over time that eroded,” Singh told the court.

According to Singh, Bankman-Fried’s frequent dipping into customers’ funds was at times done “unilaterally” and was often “excessive.”

The issues of the executives’ lavish spending and the company’s poor investments were ones Singh eventually decided to raise to the former FTX CEO. But, when he broached the subject among a group of the company’s employees, Bankman-Fried berated him for it, Singh told the court.

“I thought we had been fleeced for $20 million,” Singh testified, but Bankman-Fried said “it was people like me who were seeding doubt” in the company.

This story is developing and will be updated.