FTX Engineering Head Settles with CFTC

Nishad Singh, the former head of engineering at FTX, has agreed to pay $3.7 million to resolve a lawsuit brought by the U.S. Commodity Futures Trading Commission (CFTC). The case stems from allegations surrounding the collapse of the cryptocurrency exchange in November 2022 and the alleged misappropriation of user funds.

Details of the Settlement

As part of the supplemental consent order, Singh will pay a disgorgement of $3.7 million. He also faces a five-year ban on trading in markets and an eight-year registration ban, preventing him from obtaining a license to operate within the sector. The CFTC’s director of enforcement, David Miller, indicated that no additional restitution or civil monetary penalties would be pursued at this time.

Cooperation Acknowledged

David Miller stated that the current penalties reflect Singh’s cooperation with authorities. “The defendant engaged in, and aided, significant violations of the Act and CFTC regulations as the former FTX head of engineering, and the consent orders reflect the severity of these violations,” Miller said. He also emphasized the CFTC’s commitment to incentivizing material assistance in investigations.

Legal Background and Previous Charges

Singh faced legal action from the Securities and Exchange Commission (SEC), the CFTC, and the U.S. Department of Justice following FTX’s collapse. He was initially indicted in February 2023 on two counts: fraud by misappropriation and aiding and abetting fraud committed by former FTX CEO Sam Bankman-Fried.

Prior Consent Order

In April 2023, Singh entered into a consent order, acknowledging liability for the charges and agreeing to cooperate with the commission’s investigators. The SEC had also accused Singh of misusing customer funds and committing fraud in a separate case filed in February 2023.

Attorneys for Singh expressed gratitude for the resolution and noted the CFTC’s recognition of his limited role and extensive cooperation, according to Bloomberg. Prosecutors also indicted Singh and four colleagues on charges including fraud and campaign finance violations after the exchange’s downfall.