The crypto industry has been on the back foot since the beginning of 2022. But things went very badly for FTX with the exchange filing for bankruptcy as of now. Things went further south for the exchange after Binance scraped its FTX takeover deal after accessing its books. The exchange now faces a cash shortfall of a staggering $8 billion.
Following the bankruptcy ordeal, FTX’s CEO Sam Bankman-Fried resigned from his post and is now under investigation for the scandal. But Sam Bankman-Fried is not the only person who has sparked the concerned authorities’ interest.
Many others are involved in this scandal, including a tech-enthusiast Nishad Singh. Tracing his origins from India, Singh was considered a housemate of the exchange’s CEO.
But what’s the matter all about? Let’s figure out as we explore the insights into the latest events following the FTX collapse.
How Did The FTX Fiasco Unfold?
FTX has been one of the largest crypto exchanges regarding trading volume. But this changed when a report highlighted a leaked balance sheet of Alameda Research, FTX’s trading company. The balance sheet showed that Alameda Research relied heavily on FTT, FTX’s native token. More news reports showed that Bankman-Fried transferred $10 billion in customer funds to Alameda.
Following these developments, Binance announced that they would liquidate all their FTT holdings after the recent revelations. It is worth noting that Binance is also one of the largest investors in FTX. But things didn’t go as planned, as the following reports showed that Binance was planning to acquire FTX. This could have been a lifesaver for the FTX exchange, suffering from severe liquidity crunches.
Unfortunately, Binance changed its intent to buy FTX after a single look at its books. Many officials from Binance claimed that they wanted to help FTX and its users, but this damage was beyond repair. Many even described FTX’s book as a black hole with no way to establish a legitimate distinction between the assets and liabilities of the exchange.
Naturally, FTX had no other way to secure the funds it needed to keep the exchange afloat. Unfortunately, this is also when the exchange finally decided to file for bankruptcy, and the CEO resigned from his post.
But this did not end troubles for FTX, as recent revelations show any unauthorized transactions. In addition, these transactions moved hundreds of millions of funds from the platform in “suspicious circumstances.”
FTX did not reveal how much it lost due to these unauthorized transactions, but some reports suggest it could be over $600 million. More revelations have pegged up this amount to $1 billion.
The US general counsel of FTX, Ryne Miller, took to Twitter to say that the digital assets of FTX were moved into cold storage. He further added that this was done to mitigate damages after learning about the unauthorized transactions.
Everything About Nishad Singh?
Of course, many names came out as the investigation started. But during this probe, the name of an Indian-origin Nishad Singh also surfaced since he worked as a director of engineering at FTX.
Reports show the CEO of Alameda Research, Caroline Ellison, admitted that top company officials were well aware of Bankman Fried’s decision to move customer funds to Alameda. Nishad Singh was one of those top officials who were a part of an inner circle within the company.
Allison further admitted that two officials, Singh and Gary Wang, were aware of Bankman-Fried’s decision to move customer funds.
According to his LinkedIn profile, Singh started as a director of engineering at FTX in April 2019. He also holds the same post at FTX’s subsidiary Alameda. Nishad Singh previously worked at Berkley Consulting and Facebook after completing his BSc from the University of California, Berkeley.
Further reports from CoinDesk, show that all FTX’s operations were managed by a gang of kids in the Bahamas. Reports also suggest that Singh was a part of a nine people group who lived together in a luxury penthouse owned by the firm. The report also states that all these people are or used to be in a relationship with each other.
Another person familiar with the matter claimed that “Gary, Nishad, and Sam controlled the code, the matching engine, and funds of the exchange. He added that no one would notice if the trio decided to move the numbers or even input their numbers.
Did Singh Play a Role In FTX’s Collapse?
As mentioned earlier, FTX was operated by a group of nine people living their lives in a fabulous penthouse. More or less, all these nine individuals had to play one role or the other in the collapse of the exchange. An investigation on the matter is still underway, but there is strong evidence to support that Singh had a role to play in all this.
A recent report from The Wall Street Journal showed that FTX moved about $10 billion worth of customer funds from FTX to Alameda. Further reports on the matter revealed that all members in the core inner circle of FTX were well aware of this move. Hence it is safe to presume that even Nishad Singh had a role to play here, as he was well aware of these funds being moved to Alameda Research.
FTX Files For Bankruptcy – What’s Next?
As all these events unfolded, the only hope for FTX was to receive a bail-out from Binance. But as we already know, this did not happen after Binance carried out its due diligence into FTX’s books. Even then, Sam Bankman-Fried tried to revive his company by asking investors for $8 billion to pay for the withdrawal processing.
But this was not all since all these events shed some light on FTX and its top officials. Soon authorities in the US sprung into action, launching different investigations to determine how everything unfolded. Reports show that authorities from California and the federal authorities are investigating FTX.
With so many things going wrong with the FTX exchange and its top officials, the exchange has no other option but to file for bankruptcy. FTX’s CEO, Sam Bankman Fried, recently filed for bankruptcy and resigned from his position in the firm.
Overall, the situation is complex. Every day something new floats around the recent events concerning FTX. With so much ongoing, it’s only a matter of time till we can see the apparent aftermath of the event on the live markets.
