Home » Crime and Fraud • US business news » Former FTX executive reveals Bankman-Fried’s lavish spending of $1.13 billion on celebrities

Former FTX executive reveals Bankman-Fried’s lavish spending of $1.13 billion on celebrities

By Nithya Bose in Crime and Fraud, posted October 17, 2023

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.

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