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
Palantir co-founder and CEO Alex Karp attends meetings at the U.S. Capitol in Washington on Oct. 18, 2023.
Jonathan Ernst | Reuters
With Palantir’s stock plummeting more than 11% this week despite a better-than-expected earnings report, CEO Alex Karp took aim at investors betting against the software company.
Karp, who co-founded Palantir in 2003, went after short sellers in two separate interviews on CNBC this week. After “Big Short” investor Michael Burry revealed bets against Palantir and Nvidia, Karp on Tuesday accused short sellers of “market manipulation.”
He repeated that message on Friday in an interview with CNBC’s Sara Eisen, again knocking Burry’s wager against the stock.
“To get out of his position, he had to screw the whole economy by besmirching the best financials ever … that are helping the average person as investors [and] on the battlefield,” Karp said.
Even with Palantir’s slide this week, the stock is up 135% in 2025 and has multiplied 25-fold in the past three years, an extended rally that’s lifted the company’s market cap to over $420 billion. While revenue and profit are growing rapidly, the multiples have shot up much faster, and the stock now trades for about 220 times forward earnings, a ratio that rivals Tesla’s.
Nvidia and Meta, by contrast, have forward price-to-earnings ratios of about 33 and 22, respectively.
In August, Citron Research’s Andrew Left, a noted short seller, called Palantir “detached from fundamentals and analysis” and said shares should be priced at $40. It closed on Friday at $177.93 after late-day gains pushed the stock into the green.
Palantir, which builds analytics tools for large companies and government agencies, reported earnings and revenue on Monday that topped analysts’ estimates and issued a forecast that was also ahead of Wall Street projections.
But the stock fell about 8% after the report and then slid almost 7% on Thursday. Karp told Eisen that the recent boom in Palantir’s share price isn’t just for Wall Street.
“We’re delivering venture results for retail investors,” he said.
While Palantir has in the past faced a fairly heft dose of short interest, there are currently relatively few investors placing big bets against it. The short interest ratio, or the percentage of outstanding shares being sold short, peaked at over 9% in September and is now at a little over 2%, which is about as low as its been since the company went public in 2020.
Still, calling out the doubters is a common occurrence for Karp, who has previously said on CNBC that people should “exit” if they “don’t like the price.”
In May, after the stock plummeted following earnings, Karp said ,”You don’t have to buy our shares.”
“We’re happy,” he said. “We’re going to partner with the world’s best people and we’re going to dominate. You can be along for the ride or you don’t have to be.”
The company has also faced backlash over its work with government agencies like U.S. Immigration and Customs Enforcement, and Karp has admitted that his strong pro-Israel stance led some people to leave the company.
The boisterous CEO has been particularly vocal this week. On Monday’s earnings call, he questioned how happy the people are who didn’t invest in the company, and told them to “get some popcorn.”
And on CNBC he aimed much of his ire at Burry after the investor revealed his short positions in Palantir and Nvidia.
“The two companies he’s shorting are the ones making all the money, which is super weird,” Karp told CNBC’s “Squawk Box” on Tuesday. “The idea that chips and ontology is what you want to short is bats— crazy.”
Affirm CEO Max Levchin said Friday that while the buy now, pay later firm isn’t seeing credit stress among federally employed borrowers due to the government shutdown, there are signs of a change in shopping habits.
“We are seeing a very subtle loss of interest in shopping just for that group, and a couple of basis points,” Levchin told CNBC’s “Squawk on the Street.”
At least 670,000 federal employees have been furloughed in the shutdown, and about 730,000 are working without pay, the Bipartisan Policy Center said this week.
Levchin said he’s closely watching employment data for signs of major disruptions, but the company is “capable” of adjusting credit standards when needed.
“Right now, things are just fine,” he said. “We’re not seeing any major disturbances at all.”
The federal funding lapse, which began Oct. 1, is the longest in U.S. history and has halted work across agencies with an impact beyond those who are government employees. The SNAP food benefit program, which serves 42 million Americans, has also been cut off.
The comments from Levchin followed a fiscal first-quarter earnings report that blew past Wall Street’s estimates. Affirm posted earnings of 23 cents per share on $933 million in revenue. Analysts polled by LSEG expected earnings of 11 cents per share on $883 million in sales.
Revenues climbed 34% from a year ago, while gross merchandise volumes jumped 42% to $10.8 billion from $7.6 billion a year ago. That surpassed Wall Street’s $10.38 billion estimate.
The fintech company, which went public in 2021, also lifted its full-year outlook, saying it now expects gross merchandise volume to hit $47.5 billion, versus prior guidance of $46 billion.
Affirm also said it renewed its partnership with Amazon through 2031. The company has also inked deals with the likes of Shopify and Apple in a competitive e-commerce landscape.
Long-time partner Walmart recently ditched Affirm for Swedish buy now, pay later firm Klarna, which went public in September after delaying its public offering due to market uncertainty caused by President Donald Trump‘s tariff plans. Worries of a pullback in discretionary spending due to tariffs ignited fears across the fintech sector.
Levchin said categories such as ticketing and travel have seen an uptick in interest, and consumer shopping remains strong. Active consumers grew to 24.1 million from 19.5 million a year ago.
“We’re every single day out there preaching the gospel of buy now, pay later being the better way to buy, and consumers are obviously responding,” he said.
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