Former FTX deputy recalls ‘humiliating’ treatment by Sam Bankman-Fried

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Sam Bankman-Fried’s FTX cryptocurrency exchange had committed to more than $1bn in sponsorship and endorsement deals months before its collapse late last year, according to testimony from one of his lieutenants, Nishad Singh. 

Singh was head of engineering at FTX and has pleaded guilty to fraud and campaign finance violations after the exchange imploded in November. He took the stand on Monday as a witness in the high-stakes criminal fraud trial of Bankman-Fried in New York.

He said his former boss publicly became angry at him in front of colleagues after he repeatedly objected to increasingly “excessive” spending on real estate, celebrity deals and venture capital investments.

“It was pretty humiliating,” Singh, who lived in a Bahamas penthouse with Bankman-Fried and other FTX associates, said in court. He said he was increasingly “embarrassed and ashamed of how much [the spending] all reeked of . . . flashiness”.

Singh is the final co-operating witness at the trial of the former crypto billionaire. Two of Bankman-Fried’s other deputies who have pleaded guilty, Gary Wang and Caroline Ellison, earlier testified that the FTX founder orchestrated the theft of customer money from the exchange.

Bankman-Fried has pleaded not guilty and maintains his innocence. 

Prosecutors used Singh’s time on the stand on Monday morning to introduce evidence that appeared to show Bankman-Fried’s high-flying lifestyle and wild spending on celebrity connections, investments and luxury homes. 

The jury saw a photo of him in a blue T-shirt emblazoned with a football posing awkwardly in a stadium with the singer Katy Perry, the actor Orlando Bloom and Michael Kives, a celebrity agent-turned-investor who secured an investment from Bankman-Fried.

Singh described a document he said Bankman-Fried wrote that listed guests at a dinner he attended at Kives’ house including Hillary Clinton, Jeff Bezos, Leonardo DiCaprio and Kris and Kendall Jenner. Asked about the Jenners, Singh responded, “I honestly could not tell you what they do,” eliciting laughter in the courtroom.

Speaking deliberately, Singh walked the jury through a spreadsheet listing sponsorship deals FTX had agreed, including the agreement to rename Miami’s professional basketball arena, others with athletes, actors and further sports leagues. The total commitments reached $1.13bn by March 2022, about eight months before the exchange collapsed.

The figure represented the total value of the deals over many years in the future, so not all the money was immediately spent. 

The jury also heard that Bankman-Fried picked the luxurious Bahamas penthouse where he lived with nine roommates and close associates over objections from employees who thought the more than $30mn residence was too expensive.

Addressing the dispute about choosing the penthouse, Bankman-Fried said “he would pay $100mn for the drama to be done with”, Singh recalled, adding that he took it as a “pretty clear sign that I should shut up”.

The youngest member of the FTX inner circle, Singh joined Bankman-Fried’s crypto trading firm Alameda Research in late 2017 from Facebook. A close friend of Bankman-Fried’s younger brother, with whom he had attended high school, Singh said he initially had “a lot of admiration and respect” for the elder Bankman-Fried but that “over time, that eroded . . . I became distrustful”.