Casey Wagner

Two former FTX executives who pleaded guilty and cooperated with the government will be sentenced in New York in the fall.&nbsp;



Former Director of Engineering Nishad Singh and former Chief Technology Officer Gary Wang will be sentenced on Oct. 30, 2024 and Nov. 20, 2024, respectively.&nbsp;



Singh, an old high school classmate of FTX founder Sam Bankman-Fried, pleaded guilty to four federal counts in February 2023. He testified at Bankman-Fried’s trial that hedge fund Alameda Research took billions of dollars from FTX, at Bankman-Fried’s direction.&nbsp;



“I’ve always been intimidated [of Bankman-Fried],” Singh said during the November trial. “Sam’s a formidable character… I think over time a lot of that eroded.”&nbsp;



Wang, who pleaded guilty to four federal counts of fraud and conspiracy in December 2022, also helped paint an <a href="https://blockworks.co/news/sam-bankman-fried-gary-wang">incriminating picture of Bankman-Fried</a> to the jury. Wang created special advantages for Alameda Research that were not available to other FTX customers, allowing the hedge fund to place orders faster. These privileges ultimately resulted in the $8 billion hole Alameda owed the FTX exchange by the time the company collapsed in the fall of 2022.&nbsp;



The scheduling update comes roughly six weeks after Ryan Salame, another one of Bankman-Fried’s former associates, was <a href="https://blockworks.co/news/former-ftx-exec-ryan-salame-sentenced">sentenced to 7.5 years in prison</a>. Salame in September 2023 pleaded guilty to two federal counts of campaign finance violations and operating an unlicensed money-transmitting business.&nbsp;



<a href="https://blockworks.co/tag/ryan-salame">Salame</a>, the first among Bankman-Fried’s former associates to be sentenced, is the only one of the four former <a href="https://blockworks.co/tag/ftx">FTX</a> executives who pleaded guilty that did not testify against Bankman-Fried during his trial last fall.&nbsp;



Federal Judge Lewis Kaplan, who oversaw Bankman-Fried’s trial and will sentence all other parties, opted to hand down a punishment just above the government’s recommendation for Salame, which was five to seven years in prison.&nbsp;



Salame’s minimal cooperation, the prosecution said in their <a href="https://blockworks.co/news/former-ftx-exec-ryan-salame-sentencing">sentencing memo</a> in May, meant his contributions to the case against Bankman-Fried were “relatively minor.”&nbsp;



Given Nishad and Wang’s cooperation as witnesses, and the fact that they both pleaded guilty months before Salame, should result in more lenient sentences, although both could face decades.&nbsp;



Caroline Ellison, former CEO of Alameda Research and fellow government witness, has not yet had her sentencing date scheduled. Ellison pleaded guilty to seven federal counts which carry a maximum sentence of 110 years in prison.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Caroline Ellison

Former FTX execs, government witnesses to be sentenced this fall

Katherine Ross

James Cirrone

FTX co-founder Sam Bankman-Fried faces seven federal charges in a criminal trial taking place in Manhattan. The former crypto exchange exec is accused of misappropriating billions of dollars of customer funds for real estate, donations, political contributions and investments.&nbsp;



The current state of play: FTX’s former head of engineering, Nishad Singh, is expected to take the stand again this morning, with the defense telling Judge Lewis Kaplan that they expect to spend roughly four to five hours cross-examining him. The prosecution is then expected to tap another ex-Alameda employee, an FBI agent and an FTX customer. <a href="https://blockworks.co/news/sam-bankman-fried-trial-week-2">Read more here</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<h2 class="wp-block-heading">5:35 pm ET: And hello, FBI</h2>



During his testimony, FBI Agent Richard Busick displayed a somewhat matter-of-fact facial expression as the prosecution went through the cell phone records of Sam Bankman-Fried.



The jury, however, kept their eyes on the agent, who directed all of his responses to the jury box. Our resident napper in the box was snoozing off and on.



The US government was able to identify SBF’s number from an email exchange with the Prime Minister of the Bahamas after the PM’s son asked to speak to SBF about an NFT project. The full phone number is in the court transcript, but there’s probably no use in calling it at this point.



The AT&amp;T cell phone data that Busick analyzed from Bankman-Fried’s number ranged from 2021 to 2022 in New York City.



The prosecution essentially lined up the dates and times of emails sent to Bankman-Fried and other FTX employees with maps of where SBF’s phone was in Manhattan during those times.&nbsp;



The emails usually contained dinner invitations for Bankman-Fried, here’s a sneak peek of who he met up with.



On March 3, 2022, Bankman-Fried’s phone was in the vicinity of Osteria La Baia, a restaurant where he had dinner with New York Mayor Eric Adams.&nbsp;



In mid-September 2022, the government was able to establish that Bankman-Fried was invited to a meeting with New York Governor Kathy Hochul at the Capital Grille.&nbsp;



According to another email four days later, Bankman-Fried was off to meet with “President Clinton” — presumably meaning Bill Clinton — at the New York Hilton Midtown.&nbsp;



Skybridge’s Anthony Scaramucci also got a mention, having reached out to SBF to invite him to a Pittsburgh Steelers game on Nov. 20, 2022. I have a feeling that SBF was a little tied up by then…



The government showed correspondence a day later, with FTX representatives discussing a possible meetup between Bankman-Fried and the Saudi Minister of Investment at the Pierre hotel in Manhattan.&nbsp;



On the cross-examination of Busick, SBF attorney Christian Everdell countered all of this with a rather obvious and straightforward defense.



Despite the fact that the number belongs to Bankman-Fried, Busick’s cell site analysis cannot reveal who was using the cell phone at the dates, times and locations the phone pinged nearby cell towers. It also doesn’t reveal the exact location of the phone, only an estimate.



Busick agreed with all of this, and Everdell quickly wrapped up his cross.



The next potential witness from the government is professor Peter Easton, an expert on accounting. If called to testify, Easton will be the prosecution’s second expert witness.&nbsp;



Notes from the courtroom: SBF’s mom left at some point after Nishad Singh’s testimony.



<h2 class="wp-block-heading">4:00 pm ET: Bye-bye, Singh</h2>



Cohen closed his cross-examination of Nishad Singh Tuesday afternoon, wrapping up the major witnesses for the prosecution.



Singh repeatedly had to answer for a $3.7 million house he bought on Orcas Island off the coast of the state of Washington. Which was, well, purchased after that September 2022 <a href="https://blockworks.co/news/sam-bankman-fried-day-9">conversation with SBF on the balcony of the Orchid penthouse</a> in the Bahamas. Hm.&nbsp;



However, Singh did, in his cross-examination, admit that he thought about resigning a few times – once in 2018 and a handful of other times after distressing convos with SBF and FTX co-founder Gary Wang.&nbsp;



He didn’t resign, though. He didn’t move out of the Bahamas apartment until November 2022.



This leads back to the house, which had a closing date of the first week of November according to Cohen — only a few days before FTX would eventually collapse. Impeccable timing.



Back to the balcony meeting…this was the one where Singh expressed worry over the $13 billion that was missing from FTX’s balances. Bankman-Fried apparently wasn’t too worried about this, according to Singh, because it was only costing the former FTX boss “some 5-10%” of his productivity.



Cohen asked Singh multiple times why he bought the house. The answer Singh eventually settled on was that at the time he was being “selfish” because he knew he was “drawing on customer funds” to buy the property he thought would be a great place for his friends and family to kick back and relax.&nbsp;



He further called his decision to buy the property “unnecessary” and “egregious,” which is where Cohen ended his cross-examination.



Singh, during the redirect from prosecutor Nicolas Roos, admitted that he was OK with putting himself before customers in September 2022.



After Singh was dismissed, FBI Special Agent Richard Busick took the stand. Busick is an expert on cellular site data analysis.



The government has presented more than 14,000 pages of cellular data from AT&amp;T that Busick scraped together into an exhaustive report. Exciting stuff.&nbsp;



How this specifically relates to Bankman-Fried isn’t yet clear. But we’ll keep you updated…



<h2 class="wp-block-heading">2:15 pm ET: An interesting cross-examination puts a juror to sleep</h2>



And we’re back to the political donations. More specifically, Nishad Singh’s role in donating to political causes — from his point of view.



Cohen asked Singh at one point whether he thought he was required to be the face of political donations.



“Not required,” Singh responded.&nbsp;



Leading up to Singh’s cross-examination, the government narrative made it seem as if Singh was essentially bullied by Gabriel Bankman-Fried and his associates into being the flow-through point for massive amounts of money to Democratic candidates and causes.&nbsp;



Cohen also pointed out that most of the donated money came from loans. While Singh attempted to push back on the characterization, he eventually caved and agreed with it.



Then, Cohen asked — at least four times — whether Singh thought he was on the hook for the loans. Singh said he “wanted to pay them back” but he didn’t know if there was an explicit understanding that he had to pay them back. Generally, those who make loans do tend to want the money back, it’s a real bummer.



Read more: <a href="https://blockworks.co/news/sam-bankman-fried-defense-shaping-up">SBF scores rare victory in Singh cross-examination</a>



Cohen tried to bring up transcripts from Singh’s January and February meetings with the prosecutors, leading to the government reclaiming a little ground. A successful objection from the government barred the jury from seeing what happened at the meetings. Supposedly, Singh told the government in those meetings that he was expected to pay back these loans at some point.&nbsp;



All good streaks have to come to an end, however. While Cohen was able to gain some momentum with the campaign finance questioning, it was shortly lost after he misstated what happened with FTX charging ECO Serum for Serum staking fees in 2021.&nbsp;



ECO Serum was first brought up Monday, and Singh told the jury he backdated staking fees throughout the year —&nbsp;worth about $50 million — so it would appear as though FTX had $1 billion in revenue.



Despite that, Cohen tried to confirm that Singh didn’t backdate the fees.



“I did,” Singh said, contradicting Bankman-Fried’s lead defense counsel.



And, finally, Cohen picked up on a new topic: auto-deleveraging events (exciting stuff, we know).



These events occurred on FTX when no established backstop liquidity providers (BLPs) were eligible to cover other customers’ losses on risky positions. During these instances, auto-deleveraging transferred those positions to other customers, who received a more favorable market value. However, these customers hadn&#8217;t been specifically selected by FTX to shoulder such risks.



This was evident in the late summer of 2020 when an auto-deleveraging incident occurred. Singh recalled that Bankman-Fried labeled this as &#8220;undesirable.&#8221; Instead, Bankman-Fried favored having designated BLPs—entities that had consented to assume increased risks—to step in when accounts on FTX had to be liquidated.



According to Singh, Gary Wang surmised that the cause of the auto-deleveraging event in 2020 was Alameda — a backstop liquidity provider — having zero available collateral because of the sheer amount of open orders it had at the time. Having sufficient collateral was one of the requirements to be a backstop liquidity provider.



Read more: <a href="https://blockworks.co/news/alameda-good-profitable-failure">Hot take: Someone at Alameda was actually good at their job</a>



Singh said Bankman-Fried’s solution was to change the code so Alameda could act as a BLP during auto-deleveraging events — even when it didn’t have available collateral.&nbsp;



Cohen tried to portray this as a responsible move because it would essentially prevent “random customers” from taking on the losses of others. Singh appeared to agree with that view.&nbsp;



Meanwhile, live from the courtroom: Judge Kaplan remained feisty Tuesday.



Throughout cross-examination, Singh displayed a habit of providing answers to questions he wasn’t specifically asked. He appeared to want to give context to his testimony or simply speculate on things beyond what Cohen was asking him.&nbsp;



Kaplan finally told him to “stick to answering the questions you’re asked.”&nbsp;



Singh looked over at the judge, smiled and gave him a thumbs up.



<h2 class="wp-block-heading">12:15 pm ET: Just land the plane</h2>



Former FTX head of engineering Nishad Singh is being cross-examined by Sam Bankman-Fried’s lawyer Mark Cohen.&nbsp;



To absolutely no one’s surprise, a portion of the cross-examination was devoted to discussing the $8 billion bug first brought up by <a href="https://blockworks.co/news/sam-bankman-fried-witnesses-take-stand">former FTX employee Adam Yedidia two weeks ago</a>.&nbsp;



Cohen pursued a line of questioning in an effort to ascertain whether individuals at Alameda and/or FTX were tracking the size of the error in Alameda’s fiat liability or simply just the fiat liability itself with the bug included. However, Judge Kaplan felt the need to step in and referee, stating on the record that he was confused about what Cohen was pursuing.&nbsp;



While this was all playing out in open court, Bankman-Fried was seen frantically gesturing to Cohen who was still up at the lectern trying to get an answer out of Singh on discussions related to the bug in June 2022.&nbsp;



Singh finally clarified that he didn’t recall the size of the error caused by the bug being tracked.&nbsp;



However, it did come out that SBF, in a meeting about said bug, said it was “amazing” that an $8 billion balance break could be caused by a bug.



In a separate line of questioning, Cohen sought to distance SBF from the loans granted by FTX and Alameda to employees — <a href="https://blockworks.co/news/caroline-ellison-testifies-sbf-trial">including Singh, SBF, and FTX co-founder Gary Wang</a>. Singh was given a $477 million loan from FTX which Singh used to buy his first equity in FTX.&nbsp;



He focused on Singh conferring with multiple lawyers — including SBF’s alleged personal “fixer,” Dan Friedberg.



Speaking of lawyers… Singh confirmed that he also spoke to Joe Bankman and some of SBF’s personal tax attorneys about the structure of the loans.



Going back to 2019, Singh admitted he didn’t — “at the time” — see an issue with Alameda using customer funds but, obviously, Singh’s perspective changed.



He did, however, admit that he did something wrong after he doctored the Serum staking fees in December 2021, a topic discussed in this morning’s update.



Live from the courtroom: Blockworks reporter Casey Wagner also pointed out that Cohen doesn’t seem to be landing the plane, so to speak. As in, he’ll repeatedly ask a question to a witness — right now Nishad Singh — and he’ll be dogged by constant objections by the government, to which Judge Kaplan frequently responds with &#8220;sustained.”



But right when Cohen seems to be narrowing on something juicy, he’ll often redirect to the witness’s meetings with prosecutors, according to Wagner.



For example, this happened Tuesday when Cohen was asking Singh about whether he ever thought it was appropriate for Alameda to borrow from FTX. When Singh said he didn’t think it was appropriate in all cases, Cohen abandoned the line of questioning, redirected to a meeting Singh had with the government this past week.



<h2 class="wp-block-heading">10:30 am ET: A look at Monday’s revelations</h2>



If you were hankering for more drama with Samcoins, Nishad Singh delivered it Monday.



One such Samcoin, Serum (SRM), was allegedly used falsely to boost FTX’s revenue in 2021 — around $950 million — to $1 billion, the magic number.



To do that, Singh was told by Sam Bankman-Fried to charge ECO Serum, the foundation connected to the cryptocurrency, $50 million for Serum staking. To make it even more legit, Singh was also told to backdate the fee transactions in the books so it appeared as though FTX had been charging all throughout 2021 for this service.



A spreadsheet detailing these “erroneous” transfers was shared with auditors and FTX investors, according to Singh.



Singh apparently learned from Bankman-Fried’s alleged strategy of “backdating” transfers and suggested doing it again while FTX was mid-collapse in November 2022.



Over on Signal, Singh asked the FTX founder if he could make “some fictitious trades” throughout 2022 to cover some $80 million in loans he still owed to Alameda.



Bankman-Fried said, “I think that’s probably fine.”



Though, ultimately, this did not happen, according to Singh.



A common theme throughout Monday’s testimony was Singh’s concern around spending. He specifically discussed the lack of discipline Bankman-Fried had when it came to FTX spending in September 2022.



More spending usually isn’t the prudent course of action, especially when there was a $13 billion shortfall in FTX’s balance sheet (funds Gary Wang told Singh in September 2022 that Alameda borrowed).



Given the massive debt, which he referred to as “the hole,” Singh was particularly concerned with Bankman-Fried’s plans to increase spending on endorsement deals and acquisitions.



Counting all the endorsement deals with Tom Brady, Larry David, the Miami Heat and others, Singh said “there was a billion dollars headed out the door” which made him “really upset.”



And, finally, <a href="https://blockworks.co/news/sam-bankman-fried-day-9">the Adderall issue continues</a>. Yesterday, Judge Kaplan was informed that the extended-release dose of Adderall sought by the defense would not be ready until Thursday, leaving the defense seeking an adjournment. Judge Kaplan seemed reluctant to grant an adjournment or break from the court.&nbsp;



“And with all due respect to everybody&#8217;s good faith, I have not observed a problem with the defendant in this period of time,” he said.&nbsp;



Kaplan later told both the prosecution and the defense, “I can&#8217;t write the prescription, I can&#8217;t authorize the Marshals to give him pills brought in here by counsel, whom I trust entirely, but it&#8217;s not up to me. I can&#8217;t have lawyers coming in and giving drugs to people on trial because somebody says they need it. I just can&#8217;t do it.”



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Cell phone records reveal possible SBF meetings: SBF trial live updates

If you or someone you know is experiencing suicidal thoughts or a crisis, call or text the National Sucide Hotline at 988 immediately.&nbsp;



Week three of <a href="https://blockworks.co/tag/sbf-trial">Sam Bankman-Fried’s criminal trial</a> kicked off in Manhattan Monday with the disgraced crypto mogul’s old high-school-friend-turned-employee taking the stand as a government witness.&nbsp;



<a href="https://blockworks.co/tag/nishad-singh">Nishad Singh</a>, former software engineer at Alameda and FTX, rounded out the prosecution’s list of “inner circle” members that have agreed to cooperate with the government. Singh’s testimony, similar to those of his witness predecessors, got personal.&nbsp;



“I was under severe emotional distress,” Singh said of his mental state in November 2022 shortly before <a href="https://blockworks.co/tag/ftx">FTX</a> declared bankruptcy. “I’d been suicidal for some days.”&nbsp;



Tensions were high in the final days before the companies collapsed, Singh said, adding that top executives were all trying to distance themselves from culpability.&nbsp;



“There was a war room of sorts,” Singh, told the jury Monday, referring to meetings Bankman-Fried and executives had in early November 2022.&nbsp; “There was a crazy blame game going on.”&nbsp;



Singh corroborated the narrative his former co-workers have spun throughout the trial, confirming to prosecutors that Alameda was taking billions from FTX and that Bankman-Fried was the brains of the operation.&nbsp;



Read more: <a href="https://blockworks.co/news/caroline-ellison-testifies-sbf-trial">Ellison: Alameda took FTX customer money for ‘whatever we needed’</a>



<a href="https://blockworks.co/tag/sam-bankman-fried">Bankman-Fried</a> controlled nearly all of his high-level teams’ activities, Singh said, adding that his former boss told him not to sell FTT tokens and directed him to sign off on loan agreements in his name. Singh said that Bankman-Fried had him take personal loans from the companies instead of selling his FTT (FTX’s native token) holdings.&nbsp;



Singh, an old classmate of Bankman-Fried’s back at the pair’s private high school in Berkeley, California, described his relationship with his former boss as fraught.&nbsp;



“I’ve always been intimidated [of Bankman-Fried],” Singh said. “Sam’s a formidable character… I think over time a lot of that eroded.”&nbsp;



Last week, the jury heard from other members of Bankman-Fried’s executive team, including his ex-girlfriend and former Alameda CEO Caroline Ellison and Gary Wang, co-founder of FTX.&nbsp;



Read more: <a href="https://blockworks.co/news/caroline-ellison-testimony-hidden-gems">5 hidden gems from Caroline Ellison’s FTX testimony you might’ve missed</a>



Singh pleaded guilty in Feb. 2023 to four federal counts, including one count of campaign finance violations. Bankman-Fried has also been charged with election financing fraud, although these charges are not included in his current jury trial.&nbsp;



<h2 class="wp-block-heading">Delay for Adderall?&nbsp;</h2>



Bankman-Fried’s jury trial is set to continue Tuesday, although his defense team tried to adjourn until the court determined how to get Bankman-Fried his Adderall prescription.



Based on medical notes in August, senior judge Lewis Kaplan authorized four doses of Adderall per day. His attorneys however say that he has only been receiving two doses on days he spends in court. Bankman-Fried needs the medication so he can decide whether or not to take the stand later in the trial, his attorneys added.&nbsp;



Kaplan, who has let his ‘no nonsense’ nature show throughout the trial, denied the defenses’ motion to adjourn.



“I don’t even have a medical opinion that he needs it now,” Kaplan said, adding that the US Bureau of Prisons has recommended a lower dose of Adderall for Bankman-Fried.&nbsp;



“I can’t have lawyers bringing in drugs,” Kaplan added. “I just can’t do it.”&nbsp;



Bankman-Fried’s defense has been instructed to submit updated medical guidance, as has the prosecution.&nbsp;



Tuesday’s trial is set to kick off with the defense taking a stab at Singh during cross-examination.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Inside the ‘war room’ at FTX: SBF’s high school buddy takes the stand

FTX co-founder Sam Bankman-Fried faces seven federal charges in a criminal trial taking place in Manhattan. The former crypto exchange exec is accused of misappropriating billions of dollars of customer funds for real estate, donations, political contributions and investments.&nbsp;



The current state of play: FTX’s former head of engineering, Nishad Singh, is expected to take the stand this week alongside two FTX customers. Former Alameda employee Delaney Ornelas and an FBI agent will round out the prosecution’s witness list. Last week, the court heard from FTX co-founder Gary Wang, former Alameda CEO Caroline Ellison, former Alameda employee Christian Drappi and former BlockFi CEO Zac Prince. <a href="https://blockworks.co/news/sam-bankman-fried-trial-week-2">Read more here</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<h2 class="wp-block-heading">6:05 pm ET: What the hell is the plan?</h2>



Singh and SBF met on their apartment balcony in September 2022. (Maybe the paddle tennis court was taken?)



Singh said he confronted his former roommate and boss about the $13 billion hole in the FTX balance sheet — something Singh found out earlier that month from Gary Wang — to which Bankman-Fried allegedly said, “Right, that. We are a little short on deliverables.” How exactly does one define short in this scenario? Asking for a friend.&nbsp;



Don’t worry though, Bankman-Fried apparently said — in the same conversation — “this has been taking me some 5-10% of my productivity.” Oh, whew.&nbsp;



“I asked what the hell the plan was….Sam was not too worried,” Singh said.



Singh said of the entire situation leading up to the collapse, “I was blindsided and horrified…really betrayed.” The feeling was probably mutual for thousands of people who felt a similar way a short time later when they couldn’t withdraw their fiat and crypto.



US attorney Roos inquired about political donations that were made in Singh’s name to various Democratic party candidates and political action committees.&nbsp;



According to Singh, Gabriel Bankman-Fried, Sam’s brother and the head of the political action group Guardians Against Pandemics, would request a donation from Singh in a Signal chat with SBF.&nbsp;



Then, FTX Digital Markets CEO Ryan Salame would physically make the wire transfer from Singh’s account with Prime Trust, with Singh approving the transfer of funds via email.&nbsp;



Bankman-Fried’s brother would sometimes fly his assistant out to the Bahamas solely to retrieve signed checks from Singh with a blank amount. Then she’d fly back with the signed checks ready to deposit them for political donations.



Roos asked where the money being used for political donations came from, to which Singh said “customers.” Singh also said these donations were done in his name for “advantageous optics,” so it looked like he was personally donating rather than FTX.



While Bankman-Fried faces a number of charges, campaign finance violations are not on the docket in this trial, though Singh pled guilty to a charge back in February, Judge Lewis Kaplan told the jury this afternoon.



A document was floated between the FTX executives titled “We came, we saw, we researched.” It essentially outlined reasons to shut Alameda down.



Singh suggested shutting Alameda down specifically on FTX. However, this would have meant that they would have had to change the over-the-counter (OTC) system and close accounts.&nbsp;



At the time, Alameda was market making roughly 2% of trades, and was deemed replaceable on FTX.



For Tuesday, expect the defense’s cross-examination of Singh to last for four to five hours. That’s at least according to Cohen. We’ll see if he’s right.



Live from the courtroom: US attorney Damian Williams made another appearance this afternoon.



<h2 class="wp-block-heading">1:45 pm ET: More spreadsheets on deck…</h2>



After the first break of the day, Singh’s testimony got technical. Really technical. There were more spreadsheets (I thought Danielle Sassoon said we were done with these) and the jury is falling asleep (again), but let’s break it down.&nbsp;



Singh told the court that in June 2022, he was tasked with working on a project to ascertain Alameda’s true financial condition in relation to its accounts on the FTX exchange. This took place at the same time software developer Adam Yedidia was trying to fix a bug with Alameda’s fiat liability, overstating what Alameda owed to FTX to the tune of about $8 billion.



Alameda CEO Caroline Ellison sent Singh a spreadsheet detailing the crypto trading firm’s actual balances to aid him in the project. He called the balances “extremely negative,” adding that he hadn’t concerned himself with Alameda’s finances before June 2022.&nbsp;



The line of questioning then segued into Singh discussing the now-infamous “allow negative” feature that was granted to Alameda’s trading accounts on FTX.&nbsp;



Singh referenced the “allow negative” feature, but referred to it as a “flag” that Alameda had on its FTX account leading Judge Lewis Kaplan to step in, asking Singh to explain what he meant by “flag.”



“I don’t imagine it’s ‘don’t tread on me,’” Kaplan quipped.&nbsp;



Singh said that initially, his impression was that the “allow negative” feature was a positive, allowing Alameda to unlock FTT and provide other services to FTX.&nbsp;



“Initially, it allowed [Alameda] to go negative” in its trading accounts up until they hit their collateral limit, Singh explained.



Also in June 2022, Wang’s calculations showed that the total of all of Alameda and Bankman-Fried-controlled accounts on FTX showed a balance of more than negative $10 billion.



Singh said that seeing the negative balance “seriously concerned me…seemed like a serious abuse” of a feature that he believed had been meant to serve FTX, not “hurt anyone.”



In 2020, a feature in the code was changed so Alameda’s accounts could go past their collateral limit and they would never be liquidated. Roos repeatedly punctuated Singh’s points about FTX code by asking who was involved, to which Singh answered Wang and SBF.



Oh, and the infamous $35 million penthouse apartment? Singh said he didn’t even want to live there. Apparently, the group of roommates had already agreed on a living location, but then Bankman-Fried vetoed it in favor of the apartment.&nbsp;



Live from the courtroom: US attorney Damian Williams made a brief surprise guest appearance this morning.



<h2 class="wp-block-heading">12:00 pm ET: Former head of engineering takes the stand</h2>



Like FTX co-founder Gary Wang and former Alameda CEO Caroline Ellison, former head of engineering Nishad Singh took the stand — and immediately admitted guilt to crimes.&nbsp;



“I defrauded customers, investors,” of FTX, Singh said. He added that he committed money laundering and violated campaign finance laws.



He pleaded guilty to six federal charges in February, including a charge of conspiring to violate federal campaign finances laws.



Singh claims he learned of the $8 billion “hole” in FTX’s balance sheet in September 2022, just a month from the crypto exchange’s collapse on Nov. 11, 2022.&nbsp;



The former FTX executive started as a software engineer at Alameda in 2017 before moving over to a similar position at FTX in mid-2019.



His direct examination so far has been very focused on the role SBF played in the coding process. Singh claimed Bankman-Fried was “really involved in the minutia of the architecture of FTX,” claiming that he designed the margin trading system and the auto-liquidation engine that closes out customers’ accounts in the case of large losses.



It sounds like SBF rocked a lot of different hats when he led FTX. He also, according to Singh, had a monitor (one of six) devoted to Alameda’s trading positions in his office.



Bankman-Fried was portrayed by Singh as an almost larger-than-life character who graced the cover of magazines and met with celebrities. He was also the ultimate decision-maker on FTX marketing, investment decisions, endorsement deals, and other high-level business decisions.



“Sam’s a formidable character,” Singh said. “Over time,” Singh’s respect for SBF “eroded” and he claimed he grew to be “distrustful.”



But Singh stayed on with FTX until the very end, however. Asked to describe his former boss’s spending habits, Singh responded tersely.



“Excessive,” he told the jury, raising an objection from the defense.



Adding to the spending discussion, prosecutor Nicholas Roos focused heavily on the many endorsement deals, and high-dollar investments Bankman-Fried allegedly directed.



At a dinner hosted by Michael Kives, investment firm K5’s CEO, SBF was connected to a number of celebrities.&nbsp;



Singh, when asked to name the celebs, named former presidential candidate Hillary Clinton as well as Katy Perry, Orlando Bloom, and Kendall and Kris Jenner.



“I honestly could not tell you what they do,” Singh said after naming the Jenners, which made the whole court laugh. Roos, too, smiled reservedly and gave a little chuckle.



Live from the courthouse: SBF’s father, who left during Prince’s direct examination on Friday, is not present today, though Bankman-Fried’s mother is in attendance.



<h2 class="wp-block-heading">10:30 am ET: Court’s back in session</h2>



Since the court adjourned Friday afternoon, two new letters were filed — one by the prosecution and the other by the defense.&nbsp;



In an early morning filing on Monday, <a href="https://blockworks.co/tag/sam-bankman-fried">Sam Bankman-Fried</a>’s lawyers raised concerns about SBF’s Adderall. SBF’s Adderall has been mentioned multiple times — both in letter motions and in the courtroom — Judge Lewis Kaplan initially pointed the defense attorneys to the Bureau of Prisons, but the lawyers claim to have received no response to emails and “voice messages.”



On Friday, prior to court being adjourned for the weekend, the defense brought up the issue of SBF’s Adderall. The defense noted that the prosecution also has been trying to work out a solution for the issue.&nbsp;



The prosecution said that the BOP agreed to a schedule involving an extended-release dose of Adderall, which is echoed in the defense’s letter to Judge Kaplan Monday morning.&nbsp;



The “current proposal is to give Mr. Bankrnan-Fried a 12-hour extended-release 20mg dose of Adderall in the morning before he is transported to the courthouse for trial” on Monday.



Read more: <a href="https://blockworks.co/news/sam-bankman-fried-trial-week-2">Here’s what you missed during week 2 of the Sam Bankman-Fried trial</a>



If the proposal does not work, the defense is pushing for the court to adjourn for one day to work out a solution. This would mean a break on Tuesday, Oct. 17.



“However, as we approach the defense case and the critical decision of whether Mr. Bankrnan-Fried will testify, the defense has a growing concern that because of Mr. Bankman-Fried&#8217;s lack of access to Adderall he has not been able to concentrate at the level he ordinarily would and that he will not be able to meaningfully participate in the presentation of the defense case,” the defense said.



But wait, there’s more.



The prosecution, in response to a letter filed by the defense last week, pushed back on Friday evening against the defense’s argument that the US government needs to establish a “violation of the terms of the contract” to prove misappropriation of funds and therefore wire fraud.&nbsp;



Looks like the lawyers ignored the <a href="https://blockworks.co/news/sam-bankman-fried-trial-week-2">late-night moratorium on filings</a> from Judge Kaplan last week.&nbsp;



Read more: <a href="https://blockworks.co/news/sam-bankman-fried-law-expert-jack-sharman-trial-outcome">White-collar defense lawyer weighs in on SBF trial: ‘If I had to place a wager…’</a>



However, the prosecution refuted the point, saying that misappropriation occurs when fiduciary duty or a “similar relationship of trust and confidence” is breached and the relationship is not just part of a “written contract.”



The prosecution argued that they’ve already shown, through evidence, that Sam Bankman-Fried “authorized statements, beyond the Terms of Service, that indicate his own acknowledgment that FTX had such a relationship of trust with its customers.”



Additionally, the government has no issues with the defense pursuing cross-examination focused on the witness relationships with FTX. The lawyers note that they retain the right to object to certain questions (something we’ve seen a lot of so far in this trial from both sides).



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Nishad Singh’s respect for ‘formidable’ SBF ‘eroded’ over time: SBF trial live updates

Jacquelyn Melinek

<div id="highlights-block_621d2fa3456ea" class="highlights">
 <ul>
 <li>The fund will be a part of the FTX Foundation, a philanthropic organization funded primarily by FTX CEO Sam Bankman-Fried</li>
 <li>“We’re particularly keen to launch massively scalable projects: projects that could grow to productively spend tens or hundreds of millions of dollars per year,” the company said</li>
 </ul>
 
</div>



Cryptocurrency exchange FTX has launched its inaugural philanthropic fund in a bid to inject digital assets cash into charitable pursuits. 



The venture, Future Fund, will distribute at least $100 million — and perhaps as much as $1 billion — this year, “depending on how many outstanding opportunities we find,” the <a href="https://ftxfuturefund.org/announcing-the-future-fund/" target="_blank" rel="noreferrer noopener">company said</a> Monday. 



The fund falls under the umbrella of the FTX Foundation, a philanthropic organization funded primarily by <a href="https://cms.blockworks.co/ftx-valued-at-32-billion/">FTX</a> CEO Sam Bankman-Fried. It also counts major contributions from Alameda Research’s Co-CEO Caroline Ellison, FTX Co-founder and Chief Technology Officer Gary Wang, and FTX’s Head of Engineering Nishad Singh.



“There are billions of people alive today,” Bankman-Fried <a href="https://twitter.com/SBF_FTX/status/1498350635162509320?s=20&amp;t=AT_CBr91g6WG0feYMlMNQw" target="_blank" rel="noreferrer noopener">tweeted</a>. “There are trillions of people who could live great lives if we leave behind a better world to our children.”



The team compiled a list of <a href="https://ftxfuturefund.org/projects/" target="_blank" rel="noreferrer noopener">38 potential projects</a>, including artificial intelligence ethics, pathogen sterilization technology, alternative voting systems, a new university or publishing house and support for movies and documentaries. 



“We’re particularly keen to launch<a href="https://ftxfuturefund.org/massively-scalable-projects/" target="_blank" rel="noreferrer noopener"> massively scalable projects</a>: projects that could grow to productively spend tens or hundreds of millions of dollars per year,” the announcement said.



The move signifies the crypto exchange’s expansion beyond the digital asset world and into other real world industries. To date, FTX has set aside over <a href="https://ftx.com/foundation" target="_blank" rel="noreferrer noopener">$18 million</a> for charity — including $8.7 million of user contributions and $9.5 million from user fees.



The company says its corporate lines and employees have made more than $10 million of charitable donations overall.&nbsp;



Bankman-Fried, a 29-year-old worth $22.5 billion, last year donated $50 million and plans to donate $500 million next year, according to a video <a href="https://twitter.com/nasdaily/status/1486415344604491776?s=20&amp;t=GFZKOCt8tt3YIeGOpNSZDw" target="_blank" rel="noreferrer noopener">interview</a>.



“I wanted to get rich not because I liked money, but because I wanted to give that money to charity,” Bankman-Fried said in the interview.



Last week, the company <a href="https://twitter.com/SBF_FTX/status/1496980981617946624?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1496980981617946624%7Ctwgr%5E%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fwww.wsj.com%2Flivecoverage%2Frussia-ukraine-latest-news%2Fcard%2Fcrypto-exchange-ftx-gives-cash-to-ukrainians-on-its-platform-0kpNhU6rX8Lusu6PgXxu" target="_blank" rel="noreferrer noopener">gave $25</a> to every Ukrainian registered on its platform after the country’s central bank temporarily suspended its currency market and limited withdrawals.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>