Prosecutors ramp up pressure on SBF associate Nishad Singh

  • Singh was integral to FTX’s founding, indicted
  • Code was created to allow Alameda to obtain unlimited lines of credit
  • Shin and Gary Wang owed hundreds of millions

According to insiders, U.S. officials are increasing pressure on Sam Bankman-Fried’s entourage as they scrutinize former FTX associate Nishad Singh, who was integral to the founding of FTX. He hasn’t been charged with anything, but he could be.Bloomberg’s Sonali Basak report.

Shin cooperating?

Basak said:

I don’t know, but I know he was in a ‘penthouse’ and lived with SBF. He was a very close insider with Sam’s brother. Gary Wang, who pleaded guilty, is cooperating. Part of the CFTC’s allegation is that he was coded to help Alameda withdraw this unlimited line of credit that turned out to be essentially customer money. The aim is to see what role Nishad Singh played.

Who else was in the penthouse?

Who else are prosecutors looking at? One problem is the research collaborators. Damian Williams of the U.S. District Attorney’s Office said there were thousands of documents, signaling messages and more. Is Penthouse all you see, or is he the wider FTX empire?

Bassac brought up Ryan Salem, who was found to have leaked information to Bahamian authorities in Bahamian court documents. Then there is the entity FTX.US, which is said to be more shielded. People knew this “penthouse suite” was protected from them.

follow the money

When the Singh name first appeared, FTX’s new controls were taking over. They released the report and talked about the idea that SBF had lent about $1 billion through Alameda. They also said Singh and Wang owed hundreds of millions of dollars. That’s the claim. They have not responded publicly, at least.

where did whose debt go?

Some of the information comes from bankruptcy filings. Prosecutors are not bankruptcy experts. Authorities are working to track “whose loans bought where and what.” Ultimately, you will have to seize those assets and get your money back.

domino effect

In related news, cryptocurrency broker Genesis Global Trading has laid off 30% of its workforce. Withdrawals by Genesis Lending have been suspended for over a month. The question is how much of this is in loans, and how big a deal it is for Barry Silbert, head of crypto conglomerate Digital Currency Group (DCG).

gemini genesis drama

CNBC report Cameron Winklevoss, co-founder and president of the Gemini cryptocurrency exchange, has accused Silbert of engaging in “malicious” tactics. He wants to settle a nasty lending dispute with FTX following its bankruptcy.

The dispute stems from an agreement between Gemini and DCG’s subsidiary, Genesis Lending. Gemini offered its customers yields of up to 8% through its Gemini Earn lending product. To generate that yield, Gemini lent client funds to Genesis Global Capital, which lent them to institutional investors.

Gemini suspended the redemption of its Earn service days after FTX filed for bankruptcy. Genesis Global Capital has also suspended lending services. Gemini has denied any affiliation with her FTX, but Genesis tweeted in November that he had about $175 million in funds locked inside FTX.

Dispute resolution deadline is tomorrow

On January 2, Cameron Winklevoss wrote an open letter to Barry Silbert, claiming the latter had repeatedly refused to meet with the Gemini team. I set a deadline for January 8th, which is what I want to do.

It was a fiery letter, the Bloomberg host admitted. Basak concluded:

When these things are hashed on Wall Street they are done behind the backs of investment bankers and lawyers. In crypto they are done on Twitter…

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