FTX’s Ex-Engineer, Investment Firms Being Probed By US Authorities

Lavina Daryanani
Source: The Verge

Now that Sam Bankman-Fried has pleaded not guilty, US authorities are currently after FTX’s inner circle. Citing unnamed sources, a recent Bloomberg report revealed that former close FTX associate Nishad Singh is currently under the radar.

If prosecutors discover that Singh had a role in defrauding FTX and Alameda Research investors and clients, he could reportedly be charged “as soon as this month.” The source further revealed that the Securities and Exchange Commission and the Commodity Futures Trading Commission are also probing Singh.

Caroline Ellison and Gary Wang, have already pleaded guilty to fraud in connection to their roles at Alameda and FTX. They are currently working with authorities.

Read More: FTX’s Gary Wang & Alameda CEO Caroline Ellison Plead Guilty To Criminal Charges

At the moment, Singh has not been accused of wrongdoing. Neither has he been mentioned in statements by authorities probing the matter. Nevertheless, it is worth noting that Singh borrowed $543 million from Alameda, according to bankruptcy documents. However, authorities haven’t confirmed if the money was used inappropriately.

SEC Probes Financial Firms That Funded FTX

According to another parallel development reported by Reuters, the SEC is seeking details about FTX investors’ due diligence.

Citing two sources familiar with the inquiry, the media house reported that the SEC is now asking financial firms about their diligence policies and procedures in play. Furthermore, they are also inquiring whether they followed them while choosing to invest in FTX or not.

The SEC inquiries do not explicitly indicate wrongdoing. Nevertheless, it remains unclear if the firms are targets of the probe. Clarifying what sources said, Reuters noted,

But the sources said the SEC inquiries may mean the venture capital firms and investment funds that invested in FTX could face regulatory scrutiny even if they are considered victims of Bankman-Fried’s alleged scheme.”

Authorities are also allegedly looking to find out whether the firms met their fiduciary duties to their own investors or not.