Former FTX engineer tells jury about panicky rooftop meeting where he learned how bad things were
Government exhibit in Sam Bankman-Fried’s criminal trial
Source: SDNY
In afternoon testimony Monday, former FTX engineering chief Nishad Singh told a Manhattan jury about two one-on-one meetings he held with Sam Bankman-Fried last year to discuss the dire state of the crypto firm’s finances.
Singh, who joined sister hedge fund Alameda Research in 2017 and then helped build the FTX exchange two years later, said that at most he would have a single private meeting with Bankman-Fried a year, so it was rare for him to get this much face time alone with the boss.
Singh said he asked for a meeting following a text exchange he had in June 2022 with Caroline Ellison, who ran Alameda, and Gary Wang, an FTX co-founder. The trio had a Signal chat called #organization to discuss the steep public relations costs to FTX if Alameda’s financial problems were made public. During that exchange, Singh said he learned from Wang that Alameda was borrowing $13 billion from FTX.
Until that point, Singh testified, he thought FTX’s assets were greater than its liabilities. To discuss the matter, Singh said he and Bankman-Fried met on the lush rooftop deck at the Orchid, the Bahamas residential building where the FTX and Alameda crew had an 11,500-square foot apartment.
Singh is cooperating with the prosecution as part of a plea deal he agreed to in February. At the time, Singh pleaded guilty to six charges, including conspiracy to commit securities fraud, conspiracy to commit money laundering and conspiracy to violate campaign finance laws. Bankman-Fried faces seven criminal fraud charges and the potential of life in prison. He pleaded not guilty.
Over the course of a conversation that Singh said lasted an hour to an hour and a half, Bankman-Fried reclined on a white chaise lounge chair. Singh said he started the conversation by saying, “Caroline is really freaked out about the NAV situation, and so am I.” NAV refers to net asset value, or the value of assets minus liabilities.
Assistant U.S. Attorney Nicolas Roos questions Nishad Singh, the former director of engineering at FTX, at Sam Bankman-Fried’s fraud trial over the collapse of FTX, the bankrupt cryptocurrency exchange, at Federal Court in New York City, October 16, 2023 in this courtroom sketch.
Jane Rosenberg | Reuters
Bankman-Fried tried to reassure Singh, telling him, “I’m not sure what there is to worry about” because NAV was “super positive.”
When Singh asked about the $13 billion that Alameda couldn’t pay back to FTX, Bankman-Fried responded, “Right, that, we are a little short on deliverables,” according to the testimony. Singh asked about the size of the shortfall, and Bankman-Fried said that was the wrong question to be asking. The right question, he said, was how much the company could deliver. Bankman-Fried said he thought it could deliver $5 billion relatively quickly and “substantially more” in the next few weeks to months.
Singh responded with an expletive. Bankman-Fried then said the issue had been taking up 5% to 10% of his productivity that year.
But Bankman-Fried said he wasn’t too worried, and that Alameda could sell assets. FTX could also raise money from investors and was launching its U.S. futures soon, which would be a boon for the business, Bankman-Fried said, according to Singh’s testimony.
After Singh asked if he would finally agree to curb spending, Bankman-Fried said, “Yes, definitely.” Singh testified that after five years of putting everything into the company, he “felt betrayed” that it “turned out to be so evil.” He said he considered leaving every day but wasn’t sure if he could live with himself if his exit resulted in the business failing.
Bankman-Fried told Singh that he and FTX product head Ramnik Arora would be in New York in two weeks, and then in a month he’d be heading to the Middle East with Anthony Scaramucci, an FTX investor.
Singh then described in detail a second meeting that he’d requested upon Bankman-Fried’s return from the Middle East. He said the FTX founder had come back in the middle of the day and immediately attracted a crowd, “like he so often does.”
That next meeting took place in Bankman-Fried’s second Bahamas apartment, which he called the Gemini 1D apartment. There, Singh told the jury, he thought he might quit but instead asked Bankman-Fried for a real sense of how things went on the overseas trip.
Bankman-Fried said it was still possible to get another $5 billion. Singh wanted to know the plan for getting the rest needed to fill the $13 billion hole. Bankman-Fried told him the main plan was that FTX remain successful, adding that Singh was one of the few people who could make that happen.
Singh described Bankman-Fried as on edge during that conversation. He appeared mad and had his hands back, grinding his fingers and grinding his teeth.
“He glared at me with some intensity,” Singh testified. Singh then asked, “Dear god, what else is there?” At the end, he apologized to Bankman-Fried for asking for the meeting.
Singh told the jury that he faces a max of 75 years in prison but is “hoping for no jail time.”
— CNBC’s Dawn Giel contributed to this report
WATCH: FTX top engineer testifies on Sam Bankman-Fried’s ‘excessive’ spending
Technology
Nvidia positioned to weather Trump tariffs, chip demand ‘off the charts,’ says Altimeter’s Gerstner
Altimeter Capital CEO Brad Gerstner said Thursday that he’s moving out of the “bomb shelter” with Nvidia and into a position of safety, expecting that the chipmaker is positioned to withstand President Donald Trump’s widespread tariffs.
“The growth and the demand for GPUs is off the charts,” he told CNBC’s “Fast Money Halftime Report,” referring to Nvidia’s graphics processing units that are powering the artificial intelligence boom. He said investors just need to listen to commentary from OpenAI, Google and Elon Musk.
President Trump announced an expansive and aggressive “reciprocal tariff” policy in a ceremony at the White House on Wednesday. The plan established a 10% baseline tariff, though many countries like China, Vietnam and Taiwan are subject to steeper rates. The announcement sent stocks tumbling on Thursday, with the tech-heavy Nasdaq down more than 5%, headed for its worst day since 2022.
The big reason Nvidia may be better positioned to withstand Trump’s tariff hikes is because semiconductors are on the list of exceptions, which Gerstner called a “wise exception” due to the importance of AI.
Nvidia’s business has exploded since the release of OpenAI’s ChatGPT in 2022, and annual revenue has more than doubled in each of the past two fiscal years. After a massive rally, Nvidia’s stock price has dropped by more than 20% this year and was down almost 7% on Thursday.
Gerstner is concerned about the potential of a recession due to the tariffs, but is relatively bullish on Nvidia, and said the “negative impact from tariffs will be much less than in other areas.”
He said it’s key for the U.S. to stay competitive in AI. And while the company’s chips are designed domestically, they’re manufactured in Taiwan “because they can’t be fabricated in the U.S.” Higher tariffs would punish companies like Meta and Microsoft, he said.
“We’re in a global race in AI,” Gerstner said. “We can’t hamper our ability to win that race.”
Jaque Silva | Nurphoto | Getty Images
YouTube on Thursday announced new video creation tools for Shorts, its short-form video feed that competes against TikTok.
The features come at a time when TikTok, which is owned by Chinese company ByteDance, is at risk of an effective ban in the U.S. if it’s not sold to an American owner by April 5.
Among the new tools is an updated video editor that allows creators to make precise adjustments and edits, a feature that automatically syncs video cuts to the beat of a song and AI stickers.
The creator tools will become available later this spring, said YouTube, which is owned by Google.
Along with the new features, YouTube last week said it was changing the way view counts are tabulated on Shorts. Under the new guidelines, Shorts views will count the number of times the video is played or replayed with no minimum watch time requirement.
Previously, views were only counted if a video was played for a certain number of seconds. This new tabulation method is similar to how views are counted on TikTok and Meta’s Reels, and will likely inflate view counts.
“We got this feedback from creators that this is what they wanted. It’s a way for them to better understand when their Shorts have been seen,” YouTube Chief Product Officer Johanna Voolich said in a YouTube video. “It’s useful for creators who post across multiple platforms.”
WATCH: TikTok is a digital Trojan horse, says Hayman Capital’s Kyle Bass
CEO of Meta and Facebook Mark Zuckerberg, Lauren Sanchez, Amazon founder Jeff Bezos, Google CEO Sundar Pichai, and Tesla and SpaceX CEO Elon Musk attend the inauguration ceremony before Donald Trump is sworn in as the 47th U.S. president in the U.S. Capitol Rotunda in Washington, Jan. 20, 2025.
Saul Loeb | Via Reuters
Technology stocks plummeted Thursday after President Donald Trump’s new tariff policies sparked widespread market panic.
Apple led the declines among the so-called “Magnificent Seven” group, dropping nearly 9%. The iPhone maker makes its devices in China and other Asian countries. The stock is on pace for its steepest drop since 2020.
Other megacaps also felt the pressure. Meta Platforms and Amazon fell more than 7% each, while Nvidia and Tesla slumped more than 5%. Nvidia builds its new chips in Taiwan and relies on Mexico for assembling its artificial intelligence systems. Microsoft and Alphabet both fell about 2%.
Semiconductor stocks also felt the pain, with Marvell Technology, Arm Holdings and Micron Technology falling more than 8% each. Broadcom and Lam Research dropped 6%, while Advanced Micro Devices declined more than 4% Software stocks ServiceNow and Fortinet fell more than 5% each.
The drop in technology stocks came amid a broader market selloff spurred by fears of a global trade war after Trump unveiled a blanket 10% tariff on all imported goods and a range of higher duties targeting specific countries after the bell Wednesday. He said the new tariffs would be a “declaration of economic independence” for the U.S.
Companies and countries worldwide have already begun responding to the wide-sweeping policy, which included a 34% tariff on China stacked on a previous 20% tax, a 46% duty on Vietnam and a 20% levy on imports from the European Union.
China’s Ministry of Commerce urged the U.S. to “immediately cancel” the unilateral tariff measures and said it would take “resolute counter-measures.”
The tariffs come on the heels of a rough quarter for the tech-heavy Nasdaq and the worst period for the index since 2022. Stocks across the board have come under pressure over concerns of a weakening U.S. economy. The Nasdaq Composite dropped nearly 5% on Thursday, bringing its year-to-date loss to 13%.
Trump applauded some megacap technology companies for investing money into the U.S. during his speech, calling attention to Apple’s plan to spend $500 billion over the next four years.
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