<\/p>\n
Former FTX engineering director Nishad Singh called the spending habits of his former business partner \u201cexcessive\u201d and \u201cflashy\u201d as he took to the stand Monday in the third week of the criminal trial of FTX founder and former CEO Sam Bankman-Fried.<\/p>\n
Along with several other executives of the collapsed crypto exchange FTX, Singh pleaded<\/a> guilty to multiple criminal charges including fraud and campaign finance law violations in relation to the collapse and has been cooperating with the government. The prosecution hope his testimony will demonstrate<\/a> Bankman-Fried ran both FTX and its sister company Alameda Research, a crypto trading firm he founded, and is responsible for misusing billions of dollars in FTX customer funds to prop up Alameda Research.\u00a0<\/p>\n Singh\u2019s testimony is expected to bolster similar claims made in the past two weeks by the prosecution\u2019s \u201cstar\u201d witness<\/a>, Alameda Research\u2019s co-CEO Caroline Ellison, as well as FTX and Alameda co-founder Gary Wang<\/a>.<\/p>\n \u201cSBF would unilaterally spend Alameda\u2019s money,\u201d Singh told the jury, according to a live blog<\/a> of the trial from court reporting organization Inner City Press.\u00a0<\/p>\n Singh initially joined Alameda Research as a software engineer before moving to FTX and becoming its head of engineering. He met Bankman-Fried through his friendship with his brother Gabe Bankman-Fried.<\/p>\n \u201cSam is a formidable character \u2014 I came to distrust him,\u201d said Singh, telling<\/a> the jury how he did\u00a0not agree with Bankman-Fried\u2019s excessive spending.<\/p>\n \u201cI\u2019d complain about the excess & flashiness which I found different that what we were building the company for,\u201d Singh said. \u201cHe\u2019d say I didn\u2019t understand, he was out there interacting with people. I thought we were fleeced for US$20 million, he said I was sowing doubt.\u201d<\/p>\n Bankman-Fried\u2019s differentiating factor compared to the other co-founders was that he did the endorsement deals, Singh said. Singh walked the jury through some of FTX\u2019s many prominent partnerships<\/a> and relationships including with NBA superstar Steph Curry and comedian Larry David for the exchange\u2019s memorable Super Bowl ad. The total endorsement spend amounted to around US$1.3 billion, he said.<\/p>\n Bankman-Fried splurged not only on celebrities, but also on insiders. Singh described reviewing a term sheet that would provide former Hollywood agent Michael Kives and colleague Bryan Baum millions in bonuses as well as a billion dollar investment in their VC firm K5.<\/p>\n \u201cI asked that it be done with Sam\u2019s money and not FTX\u2019s money,\u201d Singh said. But Bankman-Fried told Singh the deal was \u201cbasically\u201d already done, he said.<\/p>\n The attraction to K5 came from its connections. Bankman-Fried was impressed by Kives star studded guest list at a Super Bowl party featuring former U.S. presidential candidate Hilary Clinton and actor Leonardo DiCaprio, Singh said.<\/p>\n While Singh disagreed with Bankman-Fried\u2019s excessive spending, he only found out about Alameda Research\u2019s use of over US$13 billion in FTX customer funds when the team discussed closing down<\/a> Alameda in September last year. He said he was \u201caware late in the game.\u201d<\/p>\n \u201cGary said Alameda was borrowing US$13 billion from FTX,\u201d Singh said. \u201cI was hoping I\u2019d misunderstood. FTX itself didn\u2019t have that much money.\u201d\u00a0<\/p>\n Still, Bankman-Fried continued to pursue investment deals as well as fundraise for FTX, including the potential purchase of messaging service Telegram for US$120 million. Singh was \u201cnervous\u201d about the funds coming from customers, he said.<\/p>\n \u201cI was upset at the endorsement deals, it was a billion dollars,\u201d Singh said. \u201cI said this is crazy, cut this. He said he didn\u2019t think these were bad spends. I pointed at a couple. He said he agreed, but that cutting would cost 70% of seeing them through.\u201d<\/p>\n Funds from Alameda also went toward political donations and were coordinated through a Signal chat called \u201cDonations Processing,\u201d Singh said. This group included Gabe Bankman-Fried, who ran Guarding Against Pandemics, a nonprofit advocacy group.<\/p>\nStarstruck<\/h2>\n
\u201cLate in the game\u201d<\/strong><\/h2>\n
The defense strategy<\/strong><\/h2>\n