According to Bloomberg, ex-FTX director of engineering Nishad Singh met with federal prosecutors in a proffer session at the Southern District of New York US Attorney’s Office last week. Along with Caroline Ellison and Gary Wang, he becomes the third member of Sam Bankman-Fried’s inner circle to seek a cooperation deal from authorities.
“Let me reiterate the call that I made last week: if you participated in misconduct at FTX or Alameda, now is the time to get ahead of it. We are moving quickly, and our patience is not eternal,” US SDNY Attorney Damian Williams ominously said in a December 22 Twitter post. And for now, it looks like Singh has finally listened to the voice of reason — a former FTX exec reportedly met with prosecutors in an FTX fraud case, Bloomberg reported Tuesday, citing people familiar with the matter.
In legal speak, a proffer session is a meeting between a person who is under investigation or has been charged with a crime, the person’s lawyer, and a prosecutor or investigator. Proffer sessions take place when an individual wants to share some information with law enforcement in exchange for dropped or reduced charges, or even a lower prison sentence.
Proffers are commonly seen as a prelude to cooperation, but it’s not always the case — although they often grant some degree of immunity to encourage a person to speak freely, the final decision is left to the prosecutors. They must weigh the value of the information provided by Singh to decide whether to offer him a cooperation deal.
So far, Nishad Singh hasn’t been accused of any wrongdoing. Earlier, Bloomberg reported that a former FTX exec is facing scrutiny from the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
Central to Singh’s deal with the prosecutors is information about the campaign finance side of FTX. Sam Bankman-Fried, former CEO and a central figure in the FTX fraud case, has been accused of laundering customers’ money through political and charitable donations as part of what was called a years-long “fraud of epic proportions.”
Read also: Democrats plan to return $3 million they received from FTX
The disgraced crypto mogul frequently met with U.S. politicians and regulators, as his now-insolvent exchange made generous political donations of at least $73 million to both Democrats and Republicans. Now, these contributions may be subject to recapture.
Singh, who was a Democrat super-donor and a high school friend of SBF’s brother, Gabe Bankman-Fried, could provide valuable insight into FTX’s political donations, prosecutors believe. Since 2020, Singh has given more than $9.3 million to Democratic candidates and committees, including $1 million to Mind The Gap, a political action committee founded by SBF’s mother, Barbara Fried.
According to bankruptcy court filings from November, Singh has also received $543 million in loans from Alameda Research, FTX’s infamous sister quant trading firm that brought down SBF’s crypto empire.
For context, both Caroline Ellison, former CEO of Alameda Research and Bankman-Fried’s onetime romantic partner, and Gary Wang, FTX co-founder and CTO, have pleaded guilty to fraud charges and are actively cooperating with prosecutors in a bid to lower their jail sentences — Ellison and Wang face 110 and 50 years in prison, respectively.
Recently, another high-profile FTX exec, Brett Harrison, who served as FTX US president before September 2022, took off to Twitter to say that he will provide additional information on FTX “in time.”
Obviously, all of that doesn’t bode well for Sam Bankman-Fried, who is now left in isolation as members of his inner circle either cooperate with law enforcement or distance themselves from the disgraced founder. On January 3, he entered a non-guilty plea and is set to face trial on October 2.