- Singh, who was involved in the creation of FTX faces charges
- Alameda was able to take out an unlimited credit line with Code
- Singh and Gary Wang borrowed hundreds upon millions
US authorities are ramping up pressure on Sam Bankman-Fried’s inner circle as they scrutinize Nishad Singh, a former close FTX associate according to insiders. Singh was an integral part of the founding of FTX. Although he has not been charged, he could be. Bloomberg’s Sonali Basak reports.
Singh is he cooperating?
Basak:
We don’t know, but we do know he was in the “penthouse”, he lived with SBF. He was an insider who was really close friends with Sam’s brother. Gary Wang, who pleaded guilty, is cooperating. Part of the CFTC’s allegations are that code was written to help Alameda take out this unlimited line of credit that has essentially been found to be customer money. It is now up to Nishad Singh to be revealed what his role was.
Who was there in the penthouse with you?
Who are other potential targets for prosecution? The cooperators in the investigation are one issue. Damian Williams of the US District Attorney’s office said there are thousands of documents, signal messages, etc. Is it just the penthouse you’re looking at, or is it the broader FTX empire?
Basak mentioned Ryan Salem, who Basak claimed was able to tip off Bahamian authorities in court documents. Then, there’s the entity FTX.US, which is said to be more shielded. There are things people knew…that this “penthouse suite” kept from them.
Follow the money
When Singh’s name first came up, the new control of FTX had taken over. They published the report and discussed the idea that SBF had borrowed about a billion dollars through Alameda. They also claimed that Singh and Wang had borrowed hundreds upon millions. That’s the allegation. They haven’t responded to the allegation, at most not publicly.
Whose loans went where
A lot of this information comes from bankruptcy filings. The prosecutors aren’t bankruptcy experts. The authorities are working on tracking “whose loans went where to buy what.” Ultimately, you’re going to have to seize those assets and get that money back.
The domino effect
Similar news, Genesis Global Trading, a crypto broker, has fired 30% of its staff. Genesis Lending has stopped withdrawals for more than a month. The question is: how much of this is contained to lending and how much is it a bigger problem for crypto conglomerate Digital Currency Group’s (DCG) head Barry Silbert, who is a big Wall Street voice?
Dramatism of the Gemini–Genesis
CNBC reported that Cameron Winklevoss, co-founder and president of Gemini crypto exchange, accused Silbert of engaging in “bad faith” tactics. He is seeking to settle a dispute over lending with the company, which arose after FTX collapsed.
This dispute resulted from an agreement between Gemini Lending, a DCG affiliate, and Genesis Lending. Gemini Earn offered customers yields as high as 8% through its lending product Gemini Earn. Gemini loaned customer funds to Genesis Global Capital to generate this yield. Genesis Global Capital then lent them to institutional clients.
Gemini suspended redemptions for its Earn service a few days after FTX filed for bankruptcy. Genesis Global Capital also suspended loan services. Gemini has denied any link to FTX. Genesis however tweeted in November that they held $175 Million in funds in FTX.
Tomorrow is the deadline to resolve conflicts
Cameron Winklevoss addressed an open letter on January 2 to Barry Silbert. He claimed that Silbert has refused to meet with Gemini staff on multiple occasions. He set a deadline on January 8 when Gemini wants to see a proposal to resolve the conflict…or else.
Bloomberg hosts conceded that it was a fiery note. Basak ended:
These matters are settled on Wall Street behind the backs of lawyers and investment bankers. In crypto, they’re done on Twitter…
