In Monday’s afternoon testimony, former FTX engineering chief Nishad Singh provided insights into two one-on-one meetings with Sam Bankman-Fried, the founder of FTX, held last year to discuss the precarious financial state of the cryptocurrency firm. Singh testified that it was unusual for him to have private meetings with Bankman-Fried, indicating the seriousness of the financial situation.
Singh initiated the meetings after learning, through a text exchange with Caroline Ellison and Gary Wang, that Alameda, FTX’s sister hedge fund, was borrowing $13 billion from FTX. Prior to this, Singh believed that FTX’s assets exceeded its liabilities. The meetings took place on the rooftop deck at the Orchid, a residential building in the Bahamas where FTX and Alameda had an apartment.
During the conversations, Bankman-Fried reassured Singh about FTX’s net asset value (NAV), stating that it was “super positive.” When questioned about the $13 billion Alameda owed, Bankman-Fried acknowledged a shortfall in deliverables but expressed confidence in FTX’s ability to raise money and its upcoming U.S. futures launch.
Singh, who is cooperating with the prosecution as part of a plea deal, expressed feelings of betrayal and considered leaving FTX. Bankman-Fried assured him that spending would be curbed, but Singh felt the situation was “evil.”
In a subsequent meeting, Singh contemplated quitting but sought clarity on FTX’s plans to address the financial gap. Bankman-Fried mentioned the possibility of obtaining another $5 billion and emphasized the importance of FTX’s continued success.
Singh described Bankman-Fried as agitated during the conversations, indicating the stress surrounding FTX’s financial challenges. Singh faces a maximum of 75 years in prison but is hoping for no jail time. Bankman-Fried, facing seven criminal fraud charges, has pleaded not guilty.
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