Nashad Singh, a former Director of Engineering at FTX, informed jurors that Sam Bankman-Fried had used considerable amounts of funds for venture capitalism and celebrity endorsement deals.
This is the latest in a series of statements from Bankman-Fried’s ex-colleagues which suggest fraud, bribery, and the misuse of customer funds.
Singh testified that he told Bankman-Fried he was “embarrassed” and “ashamed” about how the company would allocate its money; however, as reported by CNBC, Singh admitted to still authorizing spending even after learning customer money was involved.
He described the expenditure as “excessive,” and mentioned it had an air of “flashiness.”
Bankman-Fried and Singh met in high school, with Singh joining Alameda Research, FTX’s sister hedge fund, in 2017. Singh resided in Bankman-Fried’s Bahamas residence and said that he was awestruck by Sam’s character.
In 2022, Singh became aware of Bankman-Fried’s spending habits, evidenced by a spreadsheet of investments including $1 billion to cryptocurrency platform Genesis, $499 million to AI start-up Anthropic, and $200 million to investment firm K5 Global.
The latter was co-founded by Michael Kives, formerly an Aide to Chief of Staff Huma Abedin for Senator Hillary Rodham Clinton.
A terms sheet sent by Bankman-Fried outlined hundreds of millions in bonuses going towards Kives and Bryan Baum. Their portfolio includes investments in SpaceX, the Boring Company, and Kendall Jenner’s 818 Tequila.
A spreadsheet revealed that Alameda’s investment money came from FTX, with whom the company had a $65 billion line of credit. This resulted in an $8 billion debt comprising customer deposits.
Subsequently, Bankman-Fried reportedly attended a K5 dinner with Hillary Clinton, Katy Perry, Orlando Bloom, Leonardo DiCaprio and Kris and Kylie Jenner.
The jury also received another spreadsheet which provided information on the sponsorship deals FTX had entered into.
These included a $205 million deal for naming rights to Miami’s then-FTX Arena; a $150 million agreement to become the “official cryptocurrency exchange brand” of Major League Baseball; a $50 million endorsement from NFL legend Tom Brady; a payment of $28.5 million to NBA star Steph Curry; and finally, Larry David was paid $10 million for his participation in the show “Seinfeld”.
In total, FTX spent over one billion dollars on these endorsements. During her testimony earlier that week Caroline Ellison accused Bankman-Fried of using customer deposits to bribe Chinese officials in order to gain access to seized funds in China.
She further alleged that Alameda tried to recover this money by setting up accounts under the names of Thai prostitutes.
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