In a startling turn of events, testimony from ex-senior FTX executive Nishad
Singh has revealed that Sam Bankman-Fried and other FTX executives purportedly
expended $8 billion in customer funds on a variety of ventures, including real
estate, venture capital investments, campaign contributions, endorsement
agreements, and even a sports stadium.
The trial of Sam Bankman-Fried, now in its third week, has brought to light the
specifics of how this substantial sum was utilized. Singh, who has already
admitted to fraud, money laundering, and campaign finance violations, disclosed
that the gaping $8 billion hole in Alameda’s financial records was initially
uncovered due to a coding error that erroneously accounted for user deposits.
Furthermore, Singh’s testimony corroborated statements made by three previous
witnesses, all closely associated with Bankman-Fried: FTX CTO Gary Wang, Alameda
CEO Caroline Ellison, and FTX engineer Adam Yedidia. Although Wang and Ellison
had pleaded guilty, all three witnesses pointed to Bankman-Fried as the
mastermind behind the alleged fraud and money laundering.
Singh went on to express his concerns about Bankman-Fried’s extravagant spending
habits, stating that he frequently discovered large expenses after the fact and
that his objections were often disregarded. He referred to Bankman-Fried’s
spending as “excessive” and claimed it did not align with the company’s intended
The prosecution delved into the breakdown of how Alameda utilized the $8 billion
in customer funds, with Singh testifying that Bankman-Fried typically had the
final say in investment decisions. Notable investments included $1 billion in
Genesis Digital Assets, a crypto mining company, $500 million in Anthropic, an
AI safety-focused company, and a $200 million investment into K5 Global, a
venture firm led by Michael Kives, who boasted a significant network.
The latter investment seemed to have impressed Bankman-Fried immensely,
particularly after attending a star-studded Super Bowl Party hosted by K5 in Los
Angeles, where prominent figures like Hilary Clinton, Katy Perry, Orlando Bloom,
Leonardo DiCaprio, Jeff Bezos, and the Jenner family were in attendance.
A term sheet proposed by Bankman-Fried suggested substantial bonuses and up to
$1 billion in long-term capital to be given to K5, with the aim of leveraging
their extensive connections. Singh expressed reservations about such significant
investments, considering them detrimental to FTX and Alameda’s culture, as they
appeared to reward excessive politicking and social climbing.
Furthermore, Bankman-Fried believed that endorsement deals and unpaid
partnerships with celebrities would boost FTX’s influence and success. This
approach saw $205 million allocated to renaming the Miami Heat stadium as FTX
Arena, $150 million spent on endorsing Major League Baseball, and $1.13 billion
disbursed for endorsements from notable figures like Steph Curry, Riot, Larry
David, Tom Brady, and Gisele Bündchen.
Singh’s testimony also unveiled a series of property acquisitions using the
funds, including a $30 million penthouse in the Bahamas, which he considered
overly ostentatious. Additionally, Bankman-Fried had donated tens of millions to
Despite raising concerns about the company’s spending practices, Singh often
felt dismissed, even experiencing humiliation when Bankman-Fried chastised him
for sowing doubt in the company’s decisions.
As for the origins of the $8 billion shortfall, Singh’s testimony aligned with
Yedidia’s account. In June 2022, executives discovered that Alameda owed $8
billion in FTX customer funds after Ellison shared a Google Doc displaying an
“extremely negative” balance. Singh attributed this hole to a bug inadvertently
introduced into the system by Yedidia in 2021, which prevented the correct
accounting of user deposits.
Furthermore, Singh revealed that he had developed systems on FTX that granted
Alameda special privileges, such as trading, borrowing, and withdrawing funds
exceeding their balances. A feature called “allow negative” allowed Alameda to
operate with an excess of its balance and collateral, ultimately contributing to
the financial issues. By June 2022, Alameda had accumulated a $2.7 billion
deficit on the FTX platform, resulting in the $8 billion debt to FTX.
In summary, Singh’s testimony has exposed a range of financial irregularities
and questionable spending at FTX, with Bankman-Fried at the center of these
allegations. The trial is ongoing, with additional evidence and testimonies
expected to shed further light on the case.