FTX collapse: Indian-origin exec was part of co-founder’s ‘inner circle’ that ran crypto empire

NEW DELHI: Beleaguered cryptocurrency exchange FTX filed for bankruptcy this week after a bailout from larger rival Binance collapsed and the chances of other rescue funding looked slim. It was facing a cash shortfall of $8 billion.
After filing for bankrupcy, chief executive Sam Bankman-Fried resigned from his post and is now being investigated for his role in a multi-billion dollar scandal that may have led to the spectular collapse of one of the world’s largest trading platforms for cryptocurrencies.
Chaos at FTX
The turmoil at FTX began after crypto news website CoinDesk reported a leaked balance sheet that showed Alameda Research, Bankman-Fried’s crypto trading firm, was heavily dependent on FTX’s native token, FTT.
Sources said that Bankman-Fried had transferred $10 billion of customer funds to Alameda, Reuters reported.
Following the report, Binance CEO Changpeng Zhao said his firm would liquidate its holdings of FTT due to unspecified “recent revelations”.
It was later reported that Binance was planning to bail out FTX but decided against pursuing the deal.
After failing to secure funds, the cash-starved crypto exchange filed for bankruptcy.
In further trouble, FTX said on Saturday that it has detected unauthorized transactions in which hundreds of millions of dollars of assets were moved from the platform in “suspicious circumstances”.
FTX did not reveal how much it lost in unauthorised transactions but reports claimed the amount could be as high as $600 million. Sources, however, pegged the amount at $1 billion.
FTX’s US general counsel Ryne Miller said in a Twitter post that the firm’s digital assets were being moved into so-called cold storage “to mitigate damage upon observing the unauthorized transactions.”
Indian-origin executive under scanner
During the probe, the name of Indian-origin Nishad Singh, who worked as the director of engineering at FTX, also came up.
According to reports, Alameda Research CEO Caroline Ellison admitted that top company executives were aware of Bankman-Fried’s decision to move customer funds to Alameda.
Nishad Singh, who was part of the inner circle of executives running FTX, was one of these individuals.
Ellison told employees in a video meeting on Wednesday that she, Bankman-Fried, and two other executives — Nishad Singh and Gary Wang — were aware of the decision to move customer funds to Alameda, the Wall Street Journal said, citing people familiar with the matter.
According to Singh’s profile on LinkedIn, he took over as director of engineering at FTX in April 2019. He held the same post at Alameda Research.
Singh previously worked at Facebook and Berkeley Consulting. He did his BSc from the University of California, Berkeley.
According to CoinDesk, the whole operation of FTX was managed by a “gang of kids in the Bahamas”.
Reports say that Singh was part of the group of at least nine people who lived together in a luxury penthouse owned by the firm.
Coindesk had reported that all of them are or used to be in relationships with each other.
“Gary, Nishad and Sam control the code, the exchange’s matching engine and funds,” a person familiar with the matter claimed, adding that no one would notice if they moved them around or input their own numbers.
(With inputs from agencies)

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