In the ongoing criminal trial of Sam Bankman-Fried, the founder of the now-defunct crypto exchange FTX, shocking revelations have emerged about his extravagant spending habits. Nishad Singh, FTX’s former director of engineering, recently took the stand in Manhattan federal court.
He shed light on the massive sums Bankman-Fried poured into various endeavors, including real estate, venture investments, campaign donations, and celebrity endorsements. This article delves into how Bankman-Fried spent $1.13 billion on celebrities and sponsorships, as revealed during Singh’s testimony.
A Concerned Engineer Speaks Out
Nishad Singh, who once considered Bankman-Fried a formidable character, testified that he frequently voiced his concerns to the FTX founder regarding the company’s extravagant spending. Singh described his embarrassment and shame as he believed that FTX’s spending reeked of excessiveness and flashiness.
These revelations are crucial to the prosecution’s case, as they relate to the disappearance of billions of dollars of customer funds intended for crypto investments and client accounts. Bankman-Fried faces a range of criminal charges, including wire fraud, securities fraud, and money laundering, which could result in a life sentence.
A Connection Through the Years
Singh’s journey with Bankman-Fried dates back to their high school days when they were introduced by Bankman-Fried’s younger brother, Gabe. After studying electrical engineering and computer science at the University of California, Berkeley, Singh briefly worked at Facebook before joining Alameda in 2017.
He testified that while Bankman-Fried didn’t personally write code, he played a significant role in the coding process, particularly in designing critical elements of FTX’s technology, such as the margin system and liquidation engine.
Living With the Enigmatic Founder
In late 2021, Singh had the opportunity to live with Bankman-Fried at FTX’s opulent property in the Bahamas. Initially, Singh had held Bankman-Fried in high regard, but his admiration and respect dwindled over time.
A Billion-Dollar Spending Spree
During the trial, the court unveiled a spreadsheet detailing Bankman-Fried’s investments in 2021. Notable expenditures included $1 billion to Genesis for a mining company, $499 million to the startup Anthropic, and $200 million to investment firm K5. Singh expressed concern over the K5 investment, which included massive bonuses to its owners, Michael Kives and Bryan Baum.
This investment came to light after Bankman-Fried attended a K5 dinner alongside Hillary Clinton, Katy Perry, Orlando Bloom, Leonardo DiCaprio, and Kris and Kylie Jenner. Singh questioned whether this investment was made with FTX’s funds or Bankman-Fried’s assets, ultimately revealing it originated from Alameda.
Celebrity Sponsorships Reach Dizzying Heights
The court also presented a spreadsheet showcasing celebrity sponsorship deals, totaling a jaw-dropping $1.13 billion. These deals encompassed various high-profile endorsements, including $205 million for the FTX Arena in Miami, $150 million to Major League Baseball, $28.5 million to Stephen Curry, $50 million to Tom Brady and Gisele Bündchen, and $10 million to Larry David.
A Questionable Response
Despite learning that customer funds were being utilized for FTX’s extravagant spending, Singh admitted to still approving these transactions implicitly and explicitly.
His 6% to 7% stake in FTX made him a paper billionaire when the company was privately valued at $32 billion in early 2022. When he attempted to raise concerns with Bankman-Fried, Singh often received no response or was told he lacked sufficient context to understand the situation.
A Late-Night Appeal
Before the trial resumed, Bankman-Fried’s lawyers made a late-night appeal, requesting additional Adderall for their client, citing his treatment for depression and ADHD. This request added another layer of intrigue to the ongoing legal proceedings.