Nishad Singh, the former director of engineering at FTX, testified during the third week of Sam Bankman-Fried’s criminal trial.
On Monday, October 16, he revealed that Bankman-Fried, the founder of the failed crypto exchange, had spent large sums of money in a wide range of ways.
From real estate, venture investments, campaign donations, and celebrity endorsements, with the total coming to over $1.13 billion.
Singh’s testimony is crucial for the prosecution’s case.
It directly relates to the alleged disappearance of customer funds originally intended for cryptocurrency investments.
Bankman-Fried is facing multiple criminal charges, including wire fraud and money laundering, for which he could end up with a prison life sentence.
Singh disclosed that he became aware of financial irregularities around mid-2022.
He expressed concerns over investments in several companies.
Including a staggering $1 billion allocation to the firm Genesis for a mining company, $499 million to startup Anthropic, and $200 million to investment firm K5.
Of particular concern was the K5 investment.
The court scrutinized Bankman-Fried’s involvement and awarding of hundreds of millions of dollars in bonuses to K5 owners Michael Kives and Bryan Baum.
This investment was connected to a dinner event attended by prominent figures, such as Hillary Clinton, Katy Perry, Orlando Bloom, Leonardo DiCaprio, and Kris and Kylie Jenner.
Singh voiced his apprehensions to Bankman-Fried, suggesting that the investment was “value extractive” and inquiring whether it used FTX’s funds.
The records indicated that the funding originated from Alameda.
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The trial revealed a spreadsheet detailing celebrity sponsorship deals.
The total expenditure on celebrity endorsements alone amounted to $1.13 billion.
Despite learning that Fried used customer funds for extravagant spending at FTX, Singh admitted to approving such transactions implicitly and explicitly.
At one point, he held a 6 to 7 percent ownership in FTX, which, at a valuation of $32 billion in early 2022, made him a paper billionaire.
Singh highlighted that when he raised concerns regarding excessive spending with Bankman-Fried he either received no response or was told that he didn’t understand the full picture.
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Singh recounted an instance when Bankman-Fried lashed out over a financial loss of $20 million.
He blamed people like Singh for sowing doubt and causing issues.
Bankman-Fried’s lawyers have filed a late-night appeal requesting additional medication for their client.
He previously disclosed using medication for depression and ADHD.
The trial is expected to last well into November.