New York, NY – The Commodity Futures Trading Commission (CFTC) has filed fraud charges against Nishad Singh, a former senior executive at the collapsed cryptocurrency exchange FTX. The complaint, filed in the U.S. District Court for the Southern District of New York, alleges Singh engaged in fraud by misappropriation and aided and abetted fraud committed by FTX and its affiliated trading firm, Alameda Research.
Singh, who served as FTX’s Director of Engineering, is accused of playing a key role in a scheme that led to the loss of over $8 billion in FTX customer assets. The CFTC’s case is connected to ongoing actions against FTX founder Samuel Bankman-Fried, FTX, Alameda, and other executives including Gary Wang and Caroline Ellison.
Notably, Singh has conceded liability on the CFTC’s claims and agreed to a proposed consent order regarding his responsibility in the alleged fraud. The CFTC is pursuing restitution, disgorgement of ill-gotten gains, civil monetary penalties, and trading bans against Singh and the other defendants.
According to the complaint, from May 2019 through November 2022, FTX misrepresented to customers that their assets were securely held in custody and segregated from the company’s own funds. In reality, customer assets were routinely transferred to Alameda and allegedly misused for purposes including luxury real estate, political donations, and risky investments.
The CFTC alleges that Singh was instrumental in developing and maintaining code within FTX that facilitated the misappropriation of customer funds by Alameda. This included a feature allowing Alameda to withdraw funds from FTX even without sufficient balance, specifically a “can withdraw below borrow” function that enabled billions of dollars in customer asset withdrawals.
Furthermore, the complaint accuses Singh of personally misappropriating millions of dollars through undocumented “loans” from Alameda and other improper withdrawals for personal expenses, even after he reportedly knew the funds originated from FTX customer assets. The CFTC cautions that recovering lost funds may be difficult, as defendants may lack sufficient assets to provide restitution.
Source: CFTC.gov
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