Tuesday, February 7, 2023
HomeBreaking NewsThe Disappearing Act of Nishad Singh, FTX Billionaire

The Disappearing Act of Nishad Singh, FTX Billionaire

Nishad Singh served on the board of the company’s philanthropic arm. (File)

The rallying cry of the scorned crypto-believers, which began when FTX went bankrupt, has become even more serious after Sam Bankman-Fried was arrested in the Bahamas and charged in the US with eight criminal counts.

“Where’s Gary Wang?”

An ex-Google software engineer, Wang had earned a reputation – both internally and outside the company – as a silent fixer and the mastermind behind the FTX crypto empire. Media-shy and prone to working odd hours, the exchange’s co-founder cultivated an aura of mystery that contrasted sharply with the more high-profile Bankman-Fried.

Wang, like Bankman-Fried, was also once one of the richest twenty-somethings in the world — with a share of the company worth a staggering $1.6 billion in March, according to the Bloomberg Billionaires Index.

He is still in the Bahamas, according to a person familiar with the matter. And, as Bankman-Fried would say to Vox, “Gary is scared.”

Bankman-Fried’s arrest, made at the request of the US government, underscores the urgency of authorities to crack down on one of the crypto industry’s biggest implosions, which has left some 1 million customers in limbo . While Bankman-Fried was the public face of FTX, it was a close-knit inner circle — he, Wang, Caroline Ellison and Nishad Singh — who were reportedly aware of the decision to use FTX client money to help Alameda meet his debts. That decision ultimately doomed FTX and gets to the heart of whether they committed fraud.

Neither Wang nor Singh, both of whom were fired a week after FTX’s bankruptcy, have surfaced in the month following the epic collapse — nor have they been charged. It’s not clear if they hired a lawyer, unlike Ellison, who hired Stephanie Avakian, a former chief of enforcement at the Securities and Exchange Commission, along with others at WilmerHale.

In the case of Singh, the 27-year-old technical director who grew up in California, it is not even known where he is currently hiding.

The Disappearance Act is a departure from the outrageous roles they played at FTX, especially as Bankman-Fried became a more public figure advocating for pandemic preparedness and regulatory changes.

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“The collapse of the FTX Group appears to stem from the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals,” said John J. Ray III, FTX’s newly appointed CEO, in prepared remarks to the House Financial Services Committee this week.

Bankman-Fried was charged with criminal counts including conspiracy and wire fraud in an indictment unsealed Tuesday by a Manhattan federal court judge. The Commodity Futures Trading Commission filed a complaint Tuesday in which Bankman-Fried was the only individual defendant listed. The Securities and Exchange Commission also focused solely on Bankman-Fried.

Wang did not respond to phone calls, emails and texts asking for comment. Singh did not respond to emails and Telegram messages asking for comment.

Where’s Gary?

While “Where’s Gary Wang?” has become a common question on Twitter and Reddit message boards in the wake of FTX’s collapse, it was also what some within the company asked during the chaotic days before the stock went bust.

Instead of looking to Bankman-Fried’s Twitter chatter for solace, some employees instead sought reassurance from the actions of Wang and especially Singh, who was known as a considerate manager.

But as an ominous sign of things to come, they were nowhere to be found.

On a Slack channel for urgent technical issues, messages that would normally be answered in minutes would go unanswered for a day, according to a person familiar with the matter. When FTX general counsel Ryne Miller begged Bankman-Fried and other founders to work together, Wang would hardly respond, according to internal discussions seen by Bloomberg.

“Gary is scared, Nishad is ashamed and guilty,” Bankman-Fried would tell Vox less than a week later, in a conversation he claims was not meant to be public. His biggest mistake, he insisted, was filing for bankruptcy in the first place.

Perhaps his best chance to fix what he had done? “Either Gary or Nishad comes back,” he said.

They didn’t. Now Bankman-Fried is being held pending an extradition process, Bahamas Attorney General Ryan Pinder said Monday. The SEC on Tuesday accused him of executing a multi-year scheme to defraud investors, with chairman Gary Gensler calling his crypto empire “a house of cards based on deceit.”

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Brilliant coder

Bankman-Fried and Wang, who met at high school math camp and were roommates at the Massachusetts Institute of Technology, remained close to FTX. At one point, after being seen out of the office for a while, Bankman-Fried returned and explained to employees that he had been absent because he simply wanted to work alongside Wang, who, unlike him, could code, according to a person familiar with the matter.

Wang is “incredibly” brilliant, Singh, who was tutored by him and worked with him in Hong Kong on the development of FTX’s exchange, said in a 2020 podcast. A now-deleted blog post celebrating FTX’s first anniversary includes a photo of Wang reclining with his feet on his desk, dressed in fleece and jeans in front of six large computer screens.

It is one of the few photos of Wang available. According to court documents, he held the second-largest position in FTX.US behind Bankman-Fried, and also the second-largest stake in Alameda, with about 10 percent. He also borrowed $224.7 million from the trading house, according to the complaint filed by the SEC.

Bankman-Fried and Wang controlled access to FTX’s digital assets, according to a document filed by Ray. He said the company’s “unacceptable management practices” included using software to hide the misuse of customer funds.

Bankman-Fried disputed that he, Ellison, Singh and Wang had decided to use FTX client funds to cover Alameda’s shortfall, which if true could mean they had committed fraud. He said executives have held a meeting about whether to extend more credit to Alameda, though the distinction is difficult to parse.

“That was the point where Alameda’s margin position on FTX, well, it got significantly more leveraged,” Bankman-Fried said in an interview with Bloomberg. “In hindsight, of course, we should have just said no.”

Kindness king

Other than Bankman-Fried, Wang didn’t seem to have many friends in the company, according to a person familiar with the matter. Singh, a high school friend of Bankman-Fried’s brother who overcame asthma and set a world record for the fastest 100 miles run by a 16-year-old, was more sociable and well liked by his peers.

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“In addition to building out much of our technology infrastructure and managing most of our development team, his treatment of employees has earned him sole membership in our ‘Kings of Kindness’ Slack group,” Bankman-Fried wrote in the FTX blog post.

Singh held a 7.83 percent stake in the business silo that included FTX.US, which was worth about $572 million as of March 2022, and received a $543 million loan from Alameda, according to bankruptcy filings. He was likely one of five colleagues Bankman-Fried labeled billionaires earlier this year when asked about it.

Singh had said that working at the firms allowed him to earn more money to give away – a tenet of the effective altruism movement – and that he was considering working for a charity in the future to “do the right thing” to improve the world.

“Right now I’m lucky enough to get fulfillment in this job in a lot of ways — one of them is doing something that’s probably pretty good from an effective altruistic perspective,” he said in a 2020 podcast.

A former FTX employee said it was shocking to see Singh, who was on the board of the company’s philanthropic arm, at the center of the implosion. Another described their feelings as more heartbroken than angry because Singh allegedly knew that customers’ money was being used to save Alameda.

FTX’s collapse “hit him hard,” Bankman-Fried said of Singh in his Vox interview.

“I mean, it hit us all hard,” he said. “But it hit him HARD.”

If Singh was embarrassed and guilty, as Bankman-Fried put it, there are few signs he tried to make amends as far as FTX’s bankruptcy unfolds.

“We had no co-operation from the founders in the preparation,” Ryne Miller, FTX’s general counsel, said in response to an issue raised last month with the company’s bankruptcy process, according to internal chat logs. “It was unfortunate.”

(Except for the headline, this story has not been edited by NDTV staff and is being published from a syndicated feed.)

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