Former FTX engineering director Nishad Singh called the spending habits of his former business partner “excessive” and “flashy” as he took to the stand Monday in the third week of the criminal trial of FTX founder and former CEO Sam Bankman-Fried.
Along with several other executives of the collapsed crypto exchange FTX, Singh pleaded guilty to multiple criminal charges including fraud and campaign finance law violations in relation to the collapse and has been cooperating with the government. The prosecution hope his testimony will demonstrate Bankman-Fried ran both FTX and its sister company Alameda Research, a crypto trading firm he founded, and is responsible for misusing billions of dollars in FTX customer funds to prop up Alameda Research.
Singh’s testimony is expected to bolster similar claims made in the past two weeks by the prosecution’s “star” witness, Alameda Research’s co-CEO Caroline Ellison, as well as FTX and Alameda co-founder Gary Wang.
“SBF would unilaterally spend Alameda’s money,” Singh told the jury, according to a live blog of the trial from court reporting organization Inner City Press.
Singh initially joined Alameda Research as a software engineer before moving to FTX and becoming its head of engineering. He met Bankman-Fried through his friendship with his brother Gabe Bankman-Fried.
“Sam is a formidable character — I came to distrust him,” said Singh, telling the jury how he did not agree with Bankman-Fried’s excessive spending.
“I’d complain about the excess & flashiness which I found different that what we were building the company for,” Singh said. “He’d say I didn’t understand, he was out there interacting with people. I thought we were fleeced for US$20 million, he said I was sowing doubt.”
Starstruck
Bankman-Fried’s differentiating factor compared to the other co-founders was that he did the endorsement deals, Singh said. Singh walked the jury through some of FTX’s many prominent partnerships and relationships including with NBA superstar Steph Curry and comedian Larry David for the exchange’s memorable Super Bowl ad. The total endorsement spend amounted to around US$1.3 billion, he said.
Bankman-Fried splurged not only on celebrities, but also on insiders. Singh described reviewing a term sheet that would provide former Hollywood agent Michael Kives and colleague Bryan Baum millions in bonuses as well as a billion dollar investment in their VC firm K5.
“I asked that it be done with Sam’s money and not FTX’s money,” Singh said. But Bankman-Fried told Singh the deal was “basically” already done, he said.