- FTX Head of Engineering Nishad Singh’s testimony has dominated the third week of the Sam Bankman-Fried (SBF) trial.
- An attempt by the defense to discredit Singh may have led to undesirable results, putting the spotlight on Joseph Bankman.
- Bankman-Fried’s parents’ involvement with FTX has recently come under scrutiny.
Testimony from former FTX Head of Engineering Nishad Singh has taken center stage as the third week of Sam Bankman-Fried’s (SBF’s) criminal trial gathers momentum.
Following direct testimony largely corroborating stories from former Alameda CEO Caroline Ellison and FTX and Alameda co-founder Gary Wang, Singh faces cross-examination from the defense. However, Bankman-Fried’s attorneys’ efforts to discredit Singh may be throwing the defendant’s dad under the bus.
Joseph Bankman Caught in the Crossfire
Like several other insiders who have testified in the case, Singh admitted to committing crimes at FTX with Bankman-Fried. But Singh’s testimony stands out as he testified to have openly raised objections to many of the then FTX CEO’s decisions, albeit with little effect.
During testimony on Monday, October 16, the former FTX executive asserted that he had raised issues with several of Bankman-Fried’s spending decisions, including celebrity endorsements which reached over $1 billion, and the choice of the $35 million Bahamas penthouse, which insiders cohabitated.
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In attempts to discredit Singh during cross-examination on Tuesday, October 17, Bankman-Fried’s lawyers drew attention to a $477 million loan the former executive took. They asked Singh who he consulted before taking this loan in a nod to the defense’s previewed strategy to shift the blame for FTX’s collapse to the former CEO’s legal counsel.Â
However, the former FTX head of engineering’s answer may have given the defense more than they bargained for, spotlighting Bankman-Fried’s dad, Joseph Bankman. Singh listed the Stanford law professor among the legal counsel he had consulted with at the time.
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The incident has drawn derision as crypto community members throw jabs at the defense’s perceived failings.
The involvement of Bankman-Fried’s parents in FTX’s affairs recently came under scrutiny following a lawsuit from the FTX estate.
Fairly Odd Parents?
In a court filing on September 18, the FTX estate accused Joseph Bankman and Barbara Fried of misappropriating millions in FTX customer funds to enrich themselves. The allegations against the former FTX CEO’s parents include using FTX customer funds to support personal causes, loans, and political donations. Nonetheless, Bankman and Fried’s attorneys have denied all of the estate’s claims.
It remains to be seen how proceedings in their son’s legal battle would affect their case. Testimony so far suggests that Bankman was part of a group chat formed by the disgraced FTX founder in the days before the exchange’s eventual collapse and, as such, was made privy to information about the company’s dire straits.
Whether Bankman was aware of the company’s predicament before then is currently unknown, though the FTX estate’s case alleges that he and his wife may have inadvertently contributed to it.
On the Flipside
- Bankman has denied any wrongdoing leading up to FTX’s collapse.
- Bankman has not been indicted in any criminal case.
Why This Matters
The testimony from Singh highlights how involved Bankman-Fried’s parents were in FTX’s affairs and how this may place constraints on the defense.
Read this to learn more about SBF’s defense’s struggles:
SBF’s Defense Appalls Judge With Fumbling of Ellison Cross
Learn more about last week’s crypto fund flows:
Crypto Extends Inflow Streak as European Dominance Continues
