The Power Play Behind FTX: Insights from the Courtroom

During a recent courtroom revelation, a former key player at FTX shed light on the controversial decision-making process of the company’s leadership.

by Faruk Imamovic
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The Power Play Behind FTX: Insights from the Courtroom
© Getty Images News/Leon Neal

During a recent courtroom revelation, a former key player at FTX shed light on the controversial decision-making process of the company’s leadership. Nishad Singh, previously the engineering director at FTX, alleged that ex-CEO Sam “SBF” Bankman-Fried wielded a level of unchecked power that strayed significantly from his official duties.

According to testimonies from the trial on Oct. 16, Singh claimed that Bankman-Fried, often referred to as SBF, frequently took it upon himself to make major financial decisions for Alameda Research, the company behind FTX.

Although Caroline Ellison and Sam Trabucco were technically at the helm of Alameda, it was “SBF” who had the final say, as Singh emphasized.

Unilateral Spending and the Strain on Trust

Despite his formal designation at FTX, Singh accused Bankman-Fried of spending Alameda’s funds without consultation or prior notification.

Singh lamented, “I learned of spending [at Alameda] after the fact. I’d complain about the excess and flashiness, which I found different than what we were building the company for”. Singh's testimonies painted a picture of a company strained by internal dissent and distrust.

According to him, challenges to Bankman-Fried’s decisions were met with dismissal. “[SBF would] say I didn’t understand, he was out there interacting with people. I thought we were fleeced for $20 million, he said I was sowing doubt”.

It's clear that Singh’s faith in Bankman-Fried deteriorated over time, as he later stated, “Sam is a formidable character. I came to distrust him”. The contentious spending extended to significant investments in high-profile ventures.

Singh highlighted investments in artificial intelligence startup Anthropic and K5 Global, an investment firm with ties to renowned personalities such as former United States Secretary of State Hillary Clinton and several Hollywood celebrities.

In an illuminating example, Singh detailed how SBF pushed for a staggering $1 billion investment in K5 Global co-owners Michael Kives and Bryan Baum’s venture capital firm. Singh made it clear that he opposed using FTX's funds for this venture, noting, “I asked that it be done with Sam’s money and not FTX’s money”.

As the trial continues, these testimonies provide a rare glimpse into the inner workings of a major player in the cryptocurrency industry. How these revelations will impact FTX and its stakeholders remains to be seen.

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