2.Nishad Singh — Direct (Part 1)
2,163 linesDIRECT EXAMINATION BY MR. ROOS:
NISHAD SINGH: At FTX.
NISHAD SINGH: I was the head of engineering.
NISHAD SINGH: I did.
NISHAD SINGH: I defrauded customers, investors, I participated in money laundering, and I violated campaign finance laws.
NISHAD SINGH: With others.
NISHAD SINGH: Sam Bankman-Fried, Gary Wang, Caroline Ellison, Ryan Salame.
NISHAD SINGH: FTX customers and investors.
NISHAD SINGH: For the customers, their money was being spent and they didn't know it. For the investors, they were -- they weren't told of the large hole and were given financials that were doctored.
MR. ROOS: And what was your role in the fraud against FTX's customers that you committed with the defendant?
NISHAD SINGH: In September of 2022, I learned of the hole. And even after that, implicitly and explicitly, I green-lit transactions that I knew must have been digging the hole deeper and therefore coming from customer funds.
NISHAD SINGH: Like the large deficit in funds that FTX should have had on hand to supply customer withdrawals.
NISHAD SINGH: I'm sure it varied over time. When I learned of it in September, my belief is that it was $8 billion.
MR. ROOS: Just yes or no, did there come a time you learned what happened with some of the customer money?
NISHAD SINGH: Yes. September 2022.
NISHAD SINGH: From conversations with Sam, Gary, and Caroline.
NISHAD SINGH: I learned that there was a hole that was enormous and that it had been spent and lost by Alameda, and I knew that it was $8 billion in size. So the last $8 billion of spend had necessarily come from customers. That spend included things like real estate investments, VC investments, campaign donations, and speculative events in trading.
NISHAD SINGH: Venture capital. Alameda acted as a venture capital firm in this crypto space.
NISHAD SINGH: Yeah. Maybe one summary is that it's the practice of investing money in other companies hoping for returns.
JUDGE KAPLAN: Excuse me. Is that any different from buying stock in Apple today or in Google today or in General Motors today? Is venture capital any different from that?
NISHAD SINGH: One distinction is, I think often venture capital is done with private equity, so you are not buying something that's publicly traded.
JUDGE KAPLAN: Go ahead.
MR. ROOS: You mentioned you committed financial crimes at FTX.
Have you pled guilty to those crimes?
NISHAD SINGH: I have.
NISHAD SINGH: Yes.
MR. ROOS: We will talk about all of that a little further. I want to take a step back and ask you about your background.
Where did you grow up?
NISHAD SINGH: The bay area in California.
NISHAD SINGH: Crystal Springs Uplands School.
NISHAD SINGH: I think in my sophomore or junior year of high school.
NISHAD SINGH: I wasn't friends with Sam, but I was close friends with his younger brother, Gabe.
NISHAD SINGH: Yes.
NISHAD SINGH: UC Berkeley.
NISHAD SINGH: Electrical engineering and computer science.
NISHAD SINGH: I briefly worked at Facebook.
NISHAD SINGH: Yes.
NISHAD SINGH: Late 2017.
NISHAD SINGH: Alameda Research.
NISHAD SINGH: Sam and Gary.
NISHAD SINGH: He was the CEO, the head trader, and founder.
NISHAD SINGH: Gary was the CTO and a founder.
NISHAD SINGH: I was a software engineer.
NISHAD SINGH: Not initially.
NISHAD SINGH: I wrote code that improved or built out trading systems for the traders to use.
NISHAD SINGH: Yes.
NISHAD SINGH: She was a trader.
NISHAD SINGH: Yes.
NISHAD SINGH: At FTX.
NISHAD SINGH: It was in mid 2019.
NISHAD SINGH: Similar. Software engineer.
NISHAD SINGH: It was pretty similar to what I did in Alameda in that I was coding at Sam and Gary's direction, this time not to build out trading systems, but instead to build out the site for other customers to trade on.
NISHAD SINGH: Gary was the CTO.
NISHAD SINGH: Chief technology officer.
NISHAD SINGH: It was similar in that we both wrote code.
NISHAD SINGH: We weren't equals. Gary supervised me. On every technical decision of importance I would either get direction from him or advice or leave it to him.
NISHAD SINGH: He did not code himself, but he was very involved in the coding process.
NISHAD SINGH: Yeah. There is the act of writing code and then there is the act of designing it and thinking about it and architecting it. Sam did not write the code, but he did a lot of the rest of that stuff. He was really involved in the sort of minutia of the architecture of FTX.
MR. ROOS: Let me ask you a follow-up question on that.
First, the writing of code, what do you mean by that? What is the writing of code?
NISHAD SINGH: Yeah. It looks like you are typing out words like you might in a Word document, only it's in a non-English language, like Python or JavaScript.
JUDGE KAPLAN: Slow down, please.
Please tell the jury what those various terms you just used mean.
NISHAD SINGH: Python is a programming language in which you can express logic for a computer to execute. JavaScript is a different programming language.
MR. ROOS: Thank you.
You also mentioned the defendant's involvement in the architecture of the code. What were you referring to?
NISHAD SINGH: Sam directed a lot of these specifics of how the code should run and what it should be doing. As an example, Sam designed all the rules for the margin system and the liquidation engine, and Gary implemented them.
JUDGE KAPLAN: You better tell us what those things are.
NISHAD SINGH: Yeah. The margin and liquidation systems are -- they were core to FTX. They were the things that considered users' balances and decided how much they could trade with them, when they should be closed out to prevent losses, and, in general, how assets were considered on the system.
JUDGE KAPLAN: Proceed.
NISHAD SINGH: Sam and Gary were.
NISHAD SINGH: No.
MR. ROOS: Were there parts of the business -- sorry. Just to follow up, you said no to whether they were equals. Can you explain the relationship dynamic.
NISHAD SINGH: Yes. Gary took instruction from Sam. Gary was in charge of all of the code and the technical systems, and Sam frequently deferred to him on those topics. But on business decisions or on -- almost anything on technical, meetings with investors, any sort of public statements, managing other departments, legal, Sam was in charge.
MR. ROOS: Were there parts of the business that you observed the defendant being involved in that Mr. Wang was not involved with?
NISHAD SINGH: Yes.
NISHAD SINGH: Marketing, raising from investors, sort of running a lot of Alameda's trading, things like endorsement deals, high-level business decisions.
NISHAD SINGH: Selling FTX equity to investors.
MR. ROOS: And you mentioned earlier in your testimony venture capital, or VC. How, if at all, were either Gary or Sam Bankman-Fried involved in that?
NISHAD SINGH: I don't think that Gary was involved, but I'm not sure because I wasn't in those meetings myself. I know Sam was very involved in VC investing.
NISHAD SINGH: From conversations with Sam about it.
NISHAD SINGH: Sam and Gary and in various projects other people, but primarily Sam and Gary.
NISHAD SINGH: No.
MR. ROOS: Were there aspects of the business you observed the defendant involved in that you yourself were not involved in?
NISHAD SINGH: Yes.
NISHAD SINGH: A bunch of the ones I had mentioned about -- that Gary wasn't involved in but Sam was: Marketing, raising, making public statements, legal decisions, high-level business decisions.
MR. ROOS: Focusing on your role and responsibilities at FTX, how, if at all, did those change over time?
NISHAD SINGH: In 2020, I started managing other engineers and growing out the team, other junior engineers, not Gary. And as a part of that I became more involved in management discussions going forward.
NISHAD SINGH: I did.
NISHAD SINGH: Starting in December of 2021, I lived with him in Albany, which is a luxury resort in the Bahamas.
NISHAD SINGH: In the Orchid 6 penthouse.
NISHAD SINGH: I have always been intimidated by Sam.
MR. COHEN: Objecting. Move to strike.
JUDGE KAPLAN: Ground.
MR. COHEN: Calls for speculation.
JUDGE KAPLAN: Overruled.
NISHAD SINGH: Sam is a formidable character, brilliant, so I had a lot of admiration and respect for him. Over time I think a lot of that eroded, and I grew distrustful.
NISHAD SINGH: I did.
NISHAD SINGH: Around 6 or 7 percent.
NISHAD SINGH: I was a billionaire.
MR. ROOS: You testified that you were not one of FTX's founders. Who gave you this valuable stake in FTX?
NISHAD SINGH: Sam and the lawyers did.
NISHAD SINGH: It was smaller than Sam's.
NISHAD SINGH: Smaller than Gary's.
MR. ROOS: Were you aware of anyone besides Sam Bankman-Fried and Gary Wang who had a larger stake than you and worked at FTX?
NISHAD SINGH: None others.
MR. ROOS: What's your understanding of why you were awarded such a large -- relatively large stake in the company?
NISHAD SINGH: In 2020, I asked to not be paid bonuses anymore and instead have equity. It's a lot more efficient for long-term donations. Sam agreed.
NISHAD SINGH: Yes.
NISHAD SINGH: $200,000.
NISHAD SINGH: I did until 2020.
NISHAD SINGH: On the order of a million dollars.
MR. ROOS: In addition to the salary, the bonuses, the stock, were you ever given any loans by the company?
NISHAD SINGH: I was.
NISHAD SINGH: Both.
MR. ROOS: We will circle back to that in a bit.
While you were working at FTX, did you ever use any form of money from the exchange, so stock, cryptocurrency, loans to make large purchases or payments?
NISHAD SINGH: Yes. I made a large investment, I made many donations, and I gave gifts to friends and family.
NISHAD SINGH: Yes.
NISHAD SINGH: I am not sure exactly when, but I think sometime early or mid 2020.
NISHAD SINGH: Right, yes.
NISHAD SINGH: Correct.
NISHAD SINGH: Not at all.
NISHAD SINGH: Nominally, Caroline Ellison and Sam Trabucco. Ultimately, Sam Bankman-Fried.
NISHAD SINGH: Trabucco and Caroline had been named the co-CEOs of Alameda. My understanding is that in the end Sam held a lot of the final say.
MR. ROOS: That year, so 2022, what observations if any, did you make about the defendant's involvement in Alameda?
NISHAD SINGH: There were a lot of things. Sam had a six-monitor setup, two tall, three wide. In his middle top monitor I saw a spreadsheet pretty frequently there that had Alameda's trading positions.
Sam also sometimes had the pointer balances page open. Pointer is like the Alameda trading UI. So this would have displayed all of Alameda's balances on different exchanges and their loans and such as far as that system tracked.
Sam also, as far as I understand, unilaterally, without going through Caroline or Sam Trabucco, spent a lot of Alameda's money with the layers effectuating loans through people like me to get them into FTX US or making investments from Alameda Research ventures.
I'm sorry. This answer is long. I know.
He referenced to me that he had threatened to fire various people at Alameda, including Caroline, implying that he held that power as well.
(Continued on next page)
BY MR. ROOS:
MR. ROOS: You used the term UI when talking about the pointer page with balances. What does UI mean?
NISHAD SINGH: User interface. It's like the website that you'd use.
MR. ROOS: You mentioned the defendant's spending at Alameda. How would you describe the defendant's approach to spending?
NISHAD SINGH: Excessive.
MR. COHEN: Objection. Can we have a foundation, your Honor.
JUDGE KAPLAN: Sustained.
NISHAD SINGH: Yes.
NISHAD SINGH: Many.
MR. ROOS: In the course of those conversations——we'll start at a high level——did you ever express a view as to his approach to spending?
NISHAD SINGH: Many times.
NISHAD SINGH: I often learned about large incidents of spend after the fact and got conflicting reports of how much was spent or who was in charge. I'd frequently go to Sam and express that I thought that, you know——my complaints varied by the instance, but that the spend was too large or that it didn't make sense——in essence, a bad business decision——and I also would express that I felt kind of embarrassed and ashamed of how——how much it all reeked of excess and flashiness. It didn't align with what I thought we were building a company for.
MR. ROOS: What was the defendant's reaction, if any, when you expressed disagreement with spending?
NISHAD SINGH: Also varied by the instance. Most cases I just didn't get a response. In some cases Sam would correctly state that I didn't have sufficient context to evaluate the spending decisions but Sam did because he was sort of out and interacting with the people that were targets of it. I'd hear that, you know, my opinions had already been factored in and if they, you know——he would——I didn't need to continue sharing them. In one instance, with other people around in the office, when I thought we had been fleeced for $20 million, Sam got visibly mad at me and said——he said that it was, you know, people like me sowing seeds of doubt in the company decisions that were the real insidious problem here. It was pretty humiliating.
MR. ROOS: Now I want to talk more specifically about the spending that was happening in late 2021 and 2022.
Let's just start by category. You mentioned venture spending. What are you referring to?
NISHAD SINGH: Venture investments made by Sam and Ramnik and others.
MR. ROOS: And then besides the venture spending, what were some of the other categories of spending that you observed in late 2021 and early 2022?
NISHAD SINGH: There was large amounts of spending on real estate and endorsement deals, things like deals with celebrities or stadiums.
MR. ROOS: And pursuant to stipulation S2003, the government offers Government Exhibit 14A, which, according to the stipulation, is a spreadsheet titled Venture Deals, dated June 17, 2022.
JUDGE KAPLAN: Stipulation Exhibit S2003 and Government Exhibit 14A are received.
(Government's Exhibits S2003 14A received in evidence)
JUDGE KAPLAN: You may.
BY MR. ROOS:
NISHAD SINGH: I do.
NISHAD SINGH: Mm-hmm, yes.
NISHAD SINGH: Yes.
NISHAD SINGH: Yes, some of them.
NISHAD SINGH: Some are a little cut off, but I can see most of them.
MR. ROOS: Okay. So starting with the top of the sheet, do you see in column A2 and A3, Genesis Digital Assets?
NISHAD SINGH: Yes.
NISHAD SINGH: Yes. Mining.
NISHAD SINGH: Yeah. I don't——yes. I don't recognize the name Genesis Digital Assets, but I know that Sam, Ramnik, and Ryan Salame visited Kazakhstan sometime in late 2021 or early 2022 to look into making a deal with a mining firm there, and I heard later in 2022 from Ramnik that they had spent a billion dollars on it.
JUDGE KAPLAN: Let me just interpose another dumb question. When I was your age, mining basically referred to digging in the ground for gold and coal and stuff like that. That's not what you're talking about, is it?
NISHAD SINGH: Almost in some ways, but no, not exactly.
JUDGE KAPLAN: Well, would you explain what you were talking about.
NISHAD SINGH: Yeah. Cryptocurrencies——proof-of-work cryptocurrencies relied on a large amount of compute being spent to solve problems, and there are big rewards, like in Bitcoin, in the case of the Bitcoin chain, for doing so. Mining is the activity of throwing a bunch of compute at those problems to get Bitcoin.
JUDGE KAPLAN: Well, I'm sure that's the best I'm going to get. I'm not sure how it's going to help me, but the jury is smarter than I am, and we'll go on.
JUDGE KAPLAN: Feel free.
BY MR. ROOS:
NISHAD SINGH: It doesn't really produce physical goods. It instead has a bunch of computers that try to solve problems. Those problems, when solved, are used to bundle together a bunch of transactions on a blockchain, making them official, and making them part of the chain.
And so the service they provide is——is sort of verifying and making official transactions that other people have proposed, and their reward is that the chain natively gives them a Bitcoin——it's one or some number of them——every time they do so.
JUDGE KAPLAN: And please forgive me if we've done this before, but tell everybody what a blockchain is.
NISHAD SINGH: It's an electronic database that tracks——it tracks a lot of transactions, but doesn't live in one place; it lives in a distributed manner across many people's computers.
BY MR. ROOS:
MR. ROOS: And you mentioned an amount. Take a look at column F at the top. Do you see the two transaction amounts at the top there?
NISHAD SINGH: Yes.
NISHAD SINGH: 150——sorry——1,050,000,000.
MR. ROOS: And how does that compare to the amount you had heard had been spent on the mining company?
NISHAD SINGH: I'd heard 1 billion, so it's pretty close.
MR. ROOS: Now take a look at column K, and the first two lines there under Investment Entity. And what is the investment entity listed for this Genesis Digital Assets investment?
NISHAD SINGH: Alameda Research LLC.
MR. ROOS: What, if any, involvement did the defendant have in acquiring or investing in the mining company you heard about?
NISHAD SINGH: I think he was calling the shots there. He went to go visit them for multiple days. That's a pretty extreme sort of sacrifice in Sam's calendar.
JUDGE KAPLAN: How do you know that?
NISHAD SINGH: I don't know that he was the one to pull the trigger on the investment. I do know that Sam was in general the one making the final decision on investments and investment team decisions as a whole.
JUDGE KAPLAN: And how do you know that?
NISHAD SINGH: Conversations with Sam and Ramnik and overhearing their process.
JUDGE KAPLAN: Proceed.
BY MR. ROOS:
MR. ROOS: Let's take a look at row 4 here on the spreadsheet. Do you see a payment to a project name called Anthropic and the investment amount of $499,999,900?
NISHAD SINGH: Yes.
NISHAD SINGH: Yes, I am.
NISHAD SINGH: It's an AI company focused on AI safety.
NISHAD SINGH: I know what we were told it was for. It was compute.
MR. COHEN: Objection, hearsay.
NISHAD SINGH: Dario Amodei——I don't know if I'm getting the pronunciation right——who runs Anthropic.
JUDGE KAPLAN: Sustained.
MR. ROOS: Just at a high level, not how the funds would be used, but why was money being sent to——withdrawn.
To what extent, if at all, was this an investment or acquisition of Anthropic?
NISHAD SINGH: It was an investment.
MR. COHEN: Objection, foundation.
JUDGE KAPLAN: Answer stricken. You can lay a foundation, if you can.
NISHAD SINGH: I did.
JUDGE KAPLAN: Let's start with what was said.
NISHAD SINGH: That we were going to invest $500 million in Anthropic.
MR. ROOS: Okay. And what involvement, if any, did the defendant have in the Anthropic investment?
NISHAD SINGH: Extreme amount of involvement. I was in the Hong Kong office——
MR. COHEN: Objection.
JUDGE KAPLAN: What's the objection?
MR. COHEN: Foundation.
JUDGE KAPLAN: Yes. Mr. Roos.
NISHAD SINGH: Yes.
NISHAD SINGH: Yes.
NISHAD SINGH: Yes.
MR. ROOS: Based on your conversations and your observations, what, if any, involvement did the defendant have in the Anthropic investment?
NISHAD SINGH: He set it up and decided on it.
MR. ROOS: What entity does the spreadsheet say was the investment entity for these Anthropic investments?
NISHAD SINGH: Alameda Research Ventures LLC.
NISHAD SINGH: Yes.
NISHAD SINGH: Yes.
MR. ROOS: And do you see on the spreadsheet in column C who it says the lead is on this investment?
NISHAD SINGH: Sam Bankman-Fried.
NISHAD SINGH: Michael Kives and Bryan Baum.
MR. ROOS: Do you know——just yes or no: Do you know whether or not the defendant ever met Michael Kives and Bryan Baum?
NISHAD SINGH: I do. Yes, he did.
JUDGE KAPLAN: How do you know that?
NISHAD SINGH: I saw them meeting.
JUDGE KAPLAN: Thank you.
NISHAD SINGH: Yes.
NISHAD SINGH: He was very impressed with their——their level of connection to influential celebrities and entrepreneurs. He thought it would be useful for FTX to leverage those connections.
NISHAD SINGH: Yes.
MR. ROOS: Pursuant to stipulation S2003, the government offers Exhibit 42, which, according to the stipulation, is a document titled K5 Relationships and Marketing, dated February 15, 2022.
JUDGE KAPLAN: It's received.
(Government's Exhibit 42 received in evidence)
JUDGE KAPLAN: You may.
BY MR. ROOS:
NISHAD SINGH: Yes, I have.
NISHAD SINGH: Sam sent this to a group of a bunch of people in some form of leadership at FTX. I think it was in the Signal chat called hashtag meetings.
NISHAD SINGH: I don't know——I can't remember anything he said about the document. I just know what the document says.
JUDGE KAPLAN: Excuse me. Was this sent to you as part of this leadership group or did you come to see it some other way?
NISHAD SINGH: I was in that group, so it was sent to me.
JUDGE KAPLAN: Thank you.
Mr. Roos, please. I don't want to have to do this every time.
BY MR. ROOS:
MR. ROOS: Let's start at the top of the document. It says, "In LA last weekend, I met with Michael Kives and his firm, K5."
At around the time did you have any conversations with the defendant about meeting with Michael Kives and his firm K5?
NISHAD SINGH: Yes.
NISHAD SINGH: Sam said that he had gone to a post- or pre-Super Bowl party in LA and that he had met the most impressive collection of people he ever had in one location and that that dinner party in which he met them was organized by the two folks at K5.
MR. ROOS: Now the document says, "In attendance at the dinner at his house were," and lists a bunch of names. Do you see that?
NISHAD SINGH: Yes.
NISHAD SINGH: Yes.
MR. ROOS: And now with this list of names of people who were at the dinner, if you recognize a person or people on the list, can you say who they are.
NISHAD SINGH: Sure. I can go through them now?
NISHAD SINGH: Hilary Clinton. She was a presidential candidate.
MR. COHEN: Stipulated.
JUDGE KAPLAN: Thank you, Mr. Cohen.
JUDGE KAPLAN: The witness can proceed. A. Doug Emhoff, who is Kamala Harris's husband; Katy Perry is a singer; Orlando Bloom is an actor; Kate Hudson I believe is an actress; Leonardo DiCaprio is an actor; Jeff Bezos ran Amazon. I don't know No. 8. I don't know No. 11. Kendall and Kris Jenner, I honestly could not tell you what they do.
NISHAD SINGH: "I don't know."
MR. ROOS: If we could zoom out on this part. And can we zoom in on the part that says, "We get from them."
MR. ROOS: It says, "We can get from them essentially infinite connections. I think that if we asked them to arrange a dinner with us, Elon, Obama, Rihanna and Zuckerberg in a month, they would probably succeed."
Did you have any conversations with the defendant about getting connections through Michael Kives or K5?
NISHAD SINGH: Yes.
MR. ROOS: And what, if anything, did the defendant say to you about the purpose of getting connections?
NISHAD SINGH: That it would be extremely valuable for FTX's and his own reputation and influence.
MR. ROOS: The second number here says, "Potential endorsement deals"; the third says, "Potential unpaid partnerships with celebrities"; the fourth says, "Working together on electoral politics." What, if anything, did the defendant say to you about why those things mattered?
NISHAD SINGH: I think he said that these are all areas in which increasing FTX's influence would help propel its success, that endorsement deals and celebrities can promote FTX. I don't recall explicitly talking about the relationship between K5 and electoral politics.
MR. ROOS: Now let's zoom out from here and go to the next page.
And can we zoom in on the last paragraph.
MR. ROOS: And do you see the second sentence that says, In particular I think it's something of a one-stop shop for relationships that we should utilize, and can supersede a lot of other things we have"?
NISHAD SINGH: I see that.
MR. ROOS: Besides writing that document, did you ever——did the defendant ever say anything to you in substance similar to this?
MR. COHEN: Objection, form.
JUDGE KAPLAN: Sustained, form.
MR. ROOS: What, if anything——well, let me just ask: Yes or no, did you have any other communications with the defendant about a one-stop shop for relationships?
NISHAD SINGH: Yes.
NISHAD SINGH: I recall him using that exact phrase, that it would be extremely convenient to not have to manage many of the relationship brokers but just this one.
MR. ROOS: After you received this document, just yes or no, did the defendant spend any more time with Michael Kives and Bryan Baum?
MR. COHEN: Objection, foundation.
JUDGE KAPLAN: Well, then the question is problematic. It's leading, so let's——
BY MR. ROOS:
MR. ROOS: Mr. Singh, what, if anything, did you observe about the defendant's interactions with Bryan Baum or Michael Kives after you received this document?
JUDGE KAPLAN: If anything. Or you've got the "if anything." Sorry.
NISHAD SINGH: I physically saw them meeting multiple times in the Bahamas penthouse, and I'd heard from Sam that they had gone on——I believe they'd gone on some trips together. Sorry. I knew they'd gone on some trips together. I can't remember if it was before or after this document.
MR. ROOS: Okay. Showing you now what's marked for identification as Government Exhibit 1451. Do you recognize people in this photo?
NISHAD SINGH: I do.
NISHAD SINGH: Katy Perry is on the far left; Orlando Bloom is to her immediate right; Michael Kives to Orlando Bloom's immediate——he's the man to his immediate right; Sam is immediately to Michael Kives's right; and I don't recognize anyone else.
JUDGE KAPLAN: Received.
(Government's Exhibit 1451 received in evidence)
JUDGE KAPLAN: Yes.
MR. ROOS: Mr. Singh, now that the jury can see it, can you point out the individuals that you just identified.
NISHAD SINGH: As in like go through the same process?
NISHAD SINGH: Sure. Katy Perry is on the far left in the green; immediately to her right is Orlando Bloom with the hat; the man immediately to his right is Michael Kives; and then Sam is immediately to Michael Kives's right.
NISHAD SINGH: Sam sent a——like a term sheet of a Google Docs to me and Gary one night after meeting with Bryan Baum in the Bahamas penthouse.
NISHAD SINGH: I was pretty shocked. It laid out hundreds of millions of dollars of bonuses to Michael Kives and Bryan Baum and proposed up to a billion dollars long term of capital to give to their VC firm. Surprising given that in the previous——by my understanding till this point was that investments——
MR. COHEN: Objection.
JUDGE KAPLAN: Sustained.
JUDGE KAPLAN: "Surprising given that."
BY MR. ROOS:
MR. ROOS: Had you had any conversations with the defendant prior to this point about the nature of the investment?
NISHAD SINGH: I talked with him about the possibility of investment. The sizes and the actual nature of them, not——I don't think we talked about those.
NISHAD SINGH: The first thing I asked was: Is this a done deal? Can we go back on this?
NISHAD SINGH: He said: It's basically done. It's not in stone, but consider it done.
NISHAD SINGH: Yeah. I was very concerned that a move like this was highly expensive and maybe not worth it on its own right. I was concerned that K5 was value extracted and that they would share——
MR. COHEN: Objection.
JUDGE KAPLAN: Strike the answer. You can re-put the question.
MR. ROOS: So what, if anything——after the point you testified up to, what, if anything, did you discuss with the defendant?
NISHAD SINGH: I was worried that partnering with K5 and giving them this much money would be really toxic to FTX and Alameda culture; that every day I was actively trying to espouse——I felt we all were——that politicking and social climbing was not going to be rewarded, and here we were rewarding people in exorbitant amounts.
MR. COHEN: Same objection.
JUDGE KAPLAN: Sir, is that something you thought or is that something you both thought and said to the defendant?
NISHAD SINGH: Thought and said.
JUDGE KAPLAN: Thank you.
Let's go on.
BY MR. ROOS:
NISHAD SINGH: I think I said a few more things and then he responded.
NISHAD SINGH: I asked that if we must go through with this that it not interact with FTX lest it mess up FTX's culture and that that meant that Sam would be the person interacting with them, not FTX people, and that it would be Sam's money and not FTX money.
MR. ROOS: Could we please put back up Government Exhibit 14A.
And can we look at column K of row 7.
NISHAD SINGH: Alameda Research Ventures LLC.
NISHAD SINGH: Yes.
NISHAD SINGH: It's a neobank.
NISHAD SINGH: It's like a bank that exists primarily online, doesn't have brick-and-mortar stores, I believe.
MR. ROOS: Besides the venture investments, what other spending was happening in the first quarter of 2022?
NISHAD SINGH: There was spending on endorsement deals and real estate.
MR. ROOS: So pursuant to stipulation S2003, the government offers Exhibit 343, which, according to stipulation, is a spreadsheet dated March 23, 2022, called Sponsorships Full.
JUDGE KAPLAN: 343 is received.
(Government's Exhibit 343 received in evidence)
JUDGE KAPLAN: You may.
BY MR. ROOS:
NISHAD SINGH: Yes.
NISHAD SINGH: Sponsorship deals and how much they cost.
NISHAD SINGH: Yes.
NISHAD SINGH: The Miami Heat NBA stadium that was renamed FTX Arena.
NISHAD SINGH: Yes.
NISHAD SINGH: This is that arena.
JUDGE KAPLAN: It's received.
(Government's Exhibit 1478 received in evidence)
JUDGE KAPLAN: You may.
NISHAD SINGH: This is the Miami Heat stadium that was renamed to FTX Arena.
NISHAD SINGH: Miami Heat.
NISHAD SINGH: It's an NBA team.
NISHAD SINGH: Summing the first three numerical values in column O, it's $205 million.
NISHAD SINGH: Yes.
NISHAD SINGH: I think Major League Baseball.
NISHAD SINGH: I don't know if rows 9 and 10 contribute, but around $150 million.
NISHAD SINGH: Yes, a great basketball player.
NISHAD SINGH: Yes.
NISHAD SINGH: I actually don't know the full nature of that.
NISHAD SINGH: According to this——
MR. COHEN: Is he just reading this? Is there a basis beyond that?
JUDGE KAPLAN: Yes. Let's find out.
MR. ROOS: Mr. Singh, at the time this was happening, as these endorsements were happening, were you familiar with some of the endorsements and their amounts?
NISHAD SINGH: I mostly learned about them after their——after the fact and certainly learned about the amounts after the fact.
NISHAD SINGH: After the payment had been made, the deals had been agreed on.
NISHAD SINGH: Like late 2022. I saw——I saw——this sheet was shown to me by Jayesh in late October or early November 2022.
NISHAD SINGH: Jayesh Peswami was the head of finance for FTX.
NISHAD SINGH: He came over to my desk and he asked me about a topic called goodwill, which he explained was something like the net present value of future expected growth of an entity, and he wanted to know what a reasonable number for Blockfolio's goodwill will be. We talked about user growth. To substantiate user growth, he showed me how much was being spent on endorsements, which, in theory, lead to user growth.
NISHAD SINGH: Yes, I'd seen it before, at that time.
NISHAD SINGH: Riot is the company that makes League of Legends. LCS is the competitive league that they run.
NISHAD SINGH: This is an endorsement deal with FTX.
MR. ROOS: Can we look at row 9. I'm sorry. Not row 9. If we look at No. 9a on the list.
Are you familiar with Tom Brady and Gisele Bündchen?
NISHAD SINGH: Yes.
NISHAD SINGH: Tom Brady is a great quarterback; Gisele Bündchen is a model and philanthropist.
MR. ROOS: What, if any, relationship were you aware of at the time between Tom Brady and Gisele Bündchen and FTX?
NISHAD SINGH: I knew there was some form of——there were a couple things. There was some form of endorsement deal. I also know that FTX was coordinating on some philanthropic efforts with Gisele.
NISHAD SINGH: Yes.
NISHAD SINGH: He wrote Seinfeld.
NISHAD SINGH: This was for his role in the Super Bowl ad.
NISHAD SINGH: 1.13 billion.
JUDGE KAPLAN: Before we get into the real estate business, we'll maybe take our morning break. Fifteen minutes, please.
COURT CLERK: All rise. Would the jury please come this way.
(Recess)
(In open court; jury present)
JUDGE KAPLAN: And folks, forgive me for one minute. Just let me see Mr. Cohen and Mr. Roos at the sidebar.
(Continued on next page)
(At the sidebar)
JUDGE KAPLAN: During the recess, I just received an automatic email saying that Mr. Bork is on extended leave.
MR. COHEN: Oh.
JUDGE KAPLAN: And in case of need, call Adam Johnson, and here's the number. I'm certainly not going to put it on the record.
MR. COHEN: Thank you, your Honor.
JUDGE KAPLAN: Do you have it?
JUDGE KAPLAN: Okay.
(Continued on next page)
(In open court)
JUDGE KAPLAN: Okay. Let's proceed.
BY MR. ROOS:
MR. ROOS: Pursuant to stipulation S2003, the government offers Exhibit 3, which, according to the stipulation, is a spreadsheet called FTX PHL Properties 2021, Leased and Purchased.
JUDGE KAPLAN: Received.
(Government's Exhibit 3 received in evidence)
JUDGE KAPLAN: You may.
BY MR. ROOS:
NISHAD SINGH: Yes.
NISHAD SINGH: A handful of them.
NISHAD SINGH: There's Albany Lot No. 44 Conch Shack, I recognize that; I think I visited some of the ones in rows 3, 4, and 5 that say Charles at the end; on row 8, Gemini Unit 1D was one of Sam's apartments; on row 12, the Orchid penthouse was Sam's apartment that I and Sam and some eight others lived in.
MR. ROOS: Could we scroll down. A. I recognize some of these One Cable Beach ones. I see that there are five and I only know of three, and I don't know which is which, but I know there were three, at least three apartments purchased at One Cable Beach under my and Sam's and Gary's name.
NISHAD SINGH: Two others. Old Fort Bay, lots 5A and 5B. I'm not certain, but I know that Joe Bankman lived in one home in Old Fort Bay, and this might be the one.
And then on row 35, the Veridian Corporate Center No. 23, that was part of the FTX office.
MR. ROOS: I just want to clarify, in row 8 it says Albany Building 9, unit 1D. Is that one of the properties you just identified the defendant lived in?
NISHAD SINGH: Yeah.
MR. ROOS: And so I want to be clear. You testified earlier that you lived with the defendant. Did you live in that property?
NISHAD SINGH: No. I lived in the Orchid penthouse in row 12. Sam moved at some point to Gemini 1D.
JUDGE KAPLAN: Yes.
NISHAD SINGH: This is that——the penthouse that me, Sam, and others lived in.
NISHAD SINGH: There were I think eight others. I can——I can list them?
NISHAD SINGH: Claire Watanabe, my girlfriend; Adam Yedidia and Andrea Lincoln; Leila Clark; Duncan Rheingans-Yoo; Caroline Ellison; Sam.
MR. ROOS: What, if any, conversations did you have with the defendant about purchasing real estate in 2021 or 2022?
NISHAD SINGH: We had a couple conversations. I can describe them.
MR. ROOS: Let me ask you more specifically then, what, if any, conversations did you have with the defendant generally about spending on real estate?
NISHAD SINGH: I had one conversation with him while I was still in Hong Kong, where he was talking to a group of people that I was in. He praised Dan Friedberg and Ryan Salame's real estate purchases freely.
MR. ROOS: And what, if any, conversations did you have with the defendant about purchasing the penthouse apartment that's depicted on the screen?
NISHAD SINGH: That group I mentioned, we wanted to live together, so we were searching for a place, we'd landed on one a fair bit less expensive; we went——some group went to go see this apartment. Sam really liked this one. Sam's a fan of views. And there was substantial disagreement about if we should go with it, in part because it was really expensive, in part because it's just super ostentatious. At one point I talked to Sam and expressed that discomfort. Sam said that he would pay $100 million for the drama to just be done with and go away, which I took as a pretty clear sign that I should shut up and we should move forward with this.
(Continued on next page)
MR. ROOS: Focusing on the period of late 2021 and early 2022, at that time what did you believe the state of Alameda's finances were?
NISHAD SINGH: I thought it was fantastically wealthy.
MR. ROOS: Just to be clear, what, if any, direct involvement in Alameda's finances did you have at that point?
NISHAD SINGH: None.
NISHAD SINGH: Yes.
NISHAD SINGH: Are you referring to the crash in May?
MR. ROOS: Let me ask you about that. What, if any, crash in cryptocurrency prices happened in May?
NISHAD SINGH: Luna and UST, an associated stablecoin, had some algorithmic failure and it crashed and, with it, brought down a bunch of other crypto prices.
MR. ROOS: Around that time what, if any, conversations did you have with the defendant about the availability?
JUDGE KAPLAN: I'm sorry. Can we just back up.
What's an algorithmic failure?
NISHAD SINGH: It's a failure in this case in the financial design of those two tokens and their interactions. I suppose the algorithm itself operated as expected. It was just not robust.
JUDGE KAPLAN: What is the algorithm supposed to do?
NISHAD SINGH: I don't actually remember the mechanics of how Luna and UST were supposed to work that well. Something about its design led to an interaction in which their price was driven to near zero.
JUDGE KAPLAN: All right. We will take it from there.
MR. ROOS: Around this time, what, if any, conversations did you have with the defendant about the availability of money?
NISHAD SINGH: That night that the crash happened, I was in the Chicago office, maybe 1, 2 a.m., or something like that. I was walking to get a snack from the pantry, and I was beckoned into a room with Ramnik Arora and Tristan Yver. Forgive me. This is not a conversation with Sam. I can skip ahead.
MR. ROOS: I'll ask you the question again. What, if any, conversations did you have with the defendant about the availability of money after the change in the cryptocurrency market?
NISHAD SINGH: Sometime in the weeks to months following this crash, there were meetings held inside my room inside the penthouse in which the topic of needing more collateral or needing more capital, rather, came up. There was a lot of mention of the lending market drying out.
MR. COHEN: Can we have a foundation, your Honor?
JUDGE KAPLAN: Go ahead.
NISHAD SINGH: Yes.
NISHAD SINGH: Always Sam, me, Gary, Caroline, Ramnik. Often Constance, Adam, Claire, Can Sun, Brett Harrison.
NISHAD SINGH: For some of these meetings -- but forgive me, I don't remember who all exactly was in it, but I know for certain Sam, Caroline, myself, Gary, Ramnik -- that the topic was how to address the fact that the capital markets -- that the lending markets are drying up and that capital is harder to come by. Alameda had taken out large loans from third-party lenders, and presumably it was getting harder to source new loans or to keep a hold of the old loans in this new marketing regime.
MR. ROOS: Let me ask you a few follow-up questions.
So you said capital. What are you referring to?
NISHAD SINGH: Lent funds for trading or other purposes.
NISHAD SINGH: Third-party crypto lenders. Genesis is a name that comes to mind here.
NISHAD SINGH: It's a firm that's in the business of lending money to, in this case, trading firms and just collecting interest on it.
NISHAD SINGH: A number of things. Sam acknowledged and agreed that capital was short. He talked about the need for capital. There were a lot of acquisitions he wanted to make. There was a discussion about if raising would be viable.
JUDGE KAPLAN: What does raising mean in this context, please?
NISHAD SINGH: Thanks. Raising money for FTX by selling its equity.
JUDGE KAPLAN: Thank you.
MR. ROOS: You mentioned a few things: Borrowing, raising. Was there anything else in your answer about what he raised in the conversations?
NISHAD SINGH: There were specifics along those lines. For example, Ramnik and Sam, I don't remember which proposed it at first, but both talked about it a lot, discussed the idea of acquiring large lending -- large sources of capital that may or may not have been lending to customers of the business, groups like Celsius, Voyager, BlockFi, in part to bail out the space and in part to make Alameda have access to more funds to borrow.
NISHAD SINGH: His title was head of product, but he primarily worked on other matters. He headed up, along with Sam, VC investments and raising from FTX investors as in selling FTX equity.
MR. ROOS: Focusing on the same time period, what, if anything, did the defendant say about the availability of money to be borrowed?
NISHAD SINGH: That it was quickly drying up.
MR. ROOS: Now, I want to turn your attention to June of 2022. Did there ever come a time where you were involved in a project relating to Alameda's balances?
NISHAD SINGH: Yes.
NISHAD SINGH: Mid June 2022.
NISHAD SINGH: Caroline, Sam, and Gary.
NISHAD SINGH: Yeah. Caroline sent over a Google Doc that had -- it reflected Alameda's system's records of what they had in balances on FTX. It was extremely negative. She asked if this was correct.
NISHAD SINGH: Yes.
NISHAD SINGH: I was friends with them socially, but I didn't have a role. I wasn't working there.
MR. ROOS: How did working on this project fit into your overall responsibilities at FTX, if at all?
NISHAD SINGH: It was pretty anomalous. It was regular for me. I didn't have any hesitation about jumping on things that needed help. If it was something that was for Alameda that related to FTX, that was fine, but I had not considered Alameda finances until this point.
MR. ROOS: What, if any, involvement had you had at looking at Alameda's balances prior to June 2022?
NISHAD SINGH: None that I recall.
NISHAD SINGH: I don't know what Caroline was thinking when she messaged the group with me, but insofar as this is a project that relies on looking at FTX, the database there, and confirming if the data that they are streaming to their system is valid, I had comfort in those technical systems.
MR. ROOS: You mentioned that Caroline Ellison circulated a spreadsheet. What, if anything, did the defendant say before receiving it?
NISHAD SINGH: I distinctly remember --
MR. COHEN: Objection.
JUDGE KAPLAN: What is the objection?
MR. COHEN: No foundation.
JUDGE KAPLAN: I thought I heard it, but, Mr. Roos, won't hurt to hear it again.
NISHAD SINGH: At the very least, myself, Gary, and Sam.
NISHAD SINGH: Sam said this can't be right. There has got to be an error. Let's dig into it.
NISHAD SINGH: Gary and I did. I asked Gary how I could help because I wasn't sure what the areas of uncertainty might be. Gary asked that I find and search for all the accounts in the FTX database that are either Alameda's or ultimately Sam is responsible for, so Sam morally owns, and to list them and list the dollar value of their holdings. I made an attempt at that. I think -- Gary thought it was not a great attempt, so he took his own stab at it. I deleted my page and we went with Gary's.
MR. ROOS: Let's take a look at Government Exhibit 50, which is in evidence, and, according to the stipulation, S2003, it is a June 13, 2022 spreadsheet called Alameda balances by FTX sub.
JUDGE KAPLAN: And the exhibit number again, please?
JUDGE KAPLAN: Thank you.
NISHAD SINGH: This is the sheet that -- that Caroline sent that shows Alameda systems' understanding of their balances in all of these FTX accounts.
MR. ROOS: Let me just take a background question of what we are looking at here.
What kind of document or file is this?
NISHAD SINGH: I recall this being a Google Doc.
NISHAD SINGH: Do you mind rephrasing that?
NISHAD SINGH: I received it in Google Docs form, Google Sheets.
NISHAD SINGH: It's a cloud-based version of Microsoft Excel.
NISHAD SINGH: Yeah, very closely. Had all the same contents.
NISHAD SINGH: This is the sheet that I first saw when Caroline sent us the document, so presumably the one that Caroline wrote.
NISHAD SINGH: This is the sheet that Gary made with his attempt at the technical exercise that I described.
MR. ROOS: Let me ask you a few questions about what we are seeing here.
The first column, A, says, in the first row, ID, and then there are a bunch of numbers below it.
What does that column refer to?
NISHAD SINGH: These are the IDs of those accounts in the FTX database.
NISHAD SINGH: Many objects in FTX's database had numbers associated with them and uniquely identified them. Those are called IDs colloquially. These are those identifying numbers for the accounts table.
NISHAD SINGH: The user name of those accounts. This is another column in the accounts table.
NISHAD SINGH: I didn't generate this, but I generated my version of it and I know what Gary told me to generate there. So inferring that he did the same thing or assuming he did, this is the dollar value of the holdings in each of those accounts.
MR. ROOS: So let me ask you about a few of the accounts here. You testified that the defendant said that the initial balance that Caroline Ellison calculated was wrong. Was it?
NISHAD SINGH: Yes.
NISHAD SINGH: There were many reasons it was wrong. The one that had the biggest effect, I believe, is that fiat@FTX.com, which represented the total amount that was in bank accounts to be custodied of customer fiat, that calculation, the system that had been updating that number had a bug such that the obligation that Alameda had was overstated by nearly $8 billion.
MR. ROOS: Let's break down your answer.
Starting with the basics, what do you mean when you say fiat deposits?
NISHAD SINGH: FTX supported customers sending traditional currencies. That's what I meant by fiat, things like dollars, euros, GBP.
NISHAD SINGH: In a number of ways. One of these systems involved in tracking them interacted with fiat@FTX.com's balances in that a deposit sent to a bank account was credited to a customer on the FTX system by, in effect, transferring from them in the sort of a technical system from the fiat@FTX.com account.
NISHAD SINGH: It's a special account. It's not one that customers would log into. It's an accounting-oriented account.
NISHAD SINGH: Absent bugs, it is supposed to represent negative the amount that has been net deposited of fiat in the FTX system by customers.
NISHAD SINGH: If the balance here was negative $10, then that should represent that customers have on net, after all deposits and withdrawals, deposited $10 into bank accounts.
JUDGE KAPLAN: I'm sorry. Into what bank accounts?
NISHAD SINGH: Bank accounts that customers were directed to send to by FTX to be credited on the FTX system, managed either by Alameda or FTX at different times.
JUDGE KAPLAN: And so is it correct that that was money which, at least in a sense, Alameda was borrowing from or owed to FTX?
NISHAD SINGH: It certainly owed it to FTX.
JUDGE KAPLAN: Proceed.
NISHAD SINGH: It refers to the magnitude of this number, the amount that Alameda needs to have custodied on behalf of FTX customers in banks.
MR. ROOS: What's the relationship between the number and the fiat@FTX.com account and what's supposed to be in the bank accounts?
NISHAD SINGH: It is always larger than what should be in bank accounts, but it's very close. The reason it's larger is because for some time deposits had been going into FTX bank accounts, not Alameda ones. Through that point is that the fiat@FTX.com number would have represented exactly what should be in Alameda bank accounts.
MR. ROOS: We will come back to what you just said in a moment.
You mentioned earlier in your testimony a bug. Can you describe what you are referring to.
NISHAD SINGH: Yes. Sometime in 2021, Adam Yedidia was working on the fiat system and automating the elements of it. In doing so, he accidentally introduced a bug that prevented the correct accounting for fiat@FTX.com's balances on specific types of withdrawals.
As a result, over time there was an error that grew in the balance stored for fiat@FTX.com such that, by June, it was -- the stated number is negative 19 billion but the correct number would have been negative 11.
JUDGE KAPLAN: That's June of which year, please?
NISHAD SINGH: 2022.
JUDGE KAPLAN: Thank you.
NISHAD SINGH: Mid June 2022.
MR. ROOS: Just a few more background questions on this topic.
Prior to your discussion of balances in June 2022, had you learned whether or not Alameda was accepting FTX customer deposits?
NISHAD SINGH: Yes.
NISHAD SINGH: Very, very early in FTX's existence. One of the first things that FTX did before going live was connecting it to OTC.FTX.com, which was a reskin of another OTC system that Gary and Sam had built. That system supported depositing fiat into Alameda's bank accounts. That system could be used to onboard funds via fiat deposits to FTX once they were linked.
MR. ROOS: What, if any, conversations did you have with the defendant about Alameda receiving FTX customer deposits prior to June 2022?
NISHAD SINGH: We had discussions on improving this set up technically that I helped sort of direct Adam to pursue. I'd also heard from him and from others that the reason that Alameda bank accounts were used at all in the beginning was because FTX had a hard time securing bank accounts but Alameda already had them.
NISHAD SINGH: Sam.
NISHAD SINGH: Yes.
NISHAD SINGH: He understood that it was something that Alameda --
MR. COHEN: Can we have a time frame, please.
JUDGE KAPLAN: Prior to June of 2022.
MR. COHEN: More than that.
JUDGE KAPLAN: Pardon?
MR. COHEN: Is there anything more than that?
JUDGE KAPLAN: You can inquire.
MR. COHEN: OK. Thank you, your Honor.
JUDGE KAPLAN: Proceed. A. Early, maybe December 2019, I remember discussions about the setup of fiat@FTX.com. I think I overheard them. This was an audit discussion I was participating in myself in which there was talk about how fiat@FTX.com would be incorporated into Alameda's own native sense of what their balances were, such that customer deposits made into bank accounts, plus their consideration of fiat@FTX.com, should always be zero.
NISHAD SINGH: Sam Bankman-Fried, Jen Chan, and I believe at least one trader or Alameda engineer, but I don't remember who.
NISHAD SINGH: Chief of staff of FTX.
JUDGE KAPLAN: Could I just ask go back a minute.
You were asked whether prior to your discussions of balances in June '22 you had learned whether or not Alameda was accepting FTX customer deposits, and you said yes.
Then you were asked: When did you know that? You said: Very, very early in FTX's existence. One of the first things FTX did before going live was connecting it to OTC.FTX.com, which was a reskin of another OTC system that Gary and Sam had built. That system supported depositing fiat into Alameda's bank accounts. So that system could be used to onboard funds via fiat deposits to FTX once they were linked.
Now, can you explain that answer.
NISHAD SINGH: I can talk about it mechanically, what a customer would do and how the funds --
JUDGE KAPLAN: What we are trying to find out is what you knew about Alameda taking or not taking FTX customer deposits very early in FTX's existence. Could you pick it up from there.
NISHAD SINGH: Me?
JUDGE KAPLAN: Yes. That's to you. That's a fair question.
NISHAD SINGH: I knew that FTX customers could deposit funds to Alameda bank accounts in order to be credited with those funds on FTX to trade from FTX's inception and that one of the ways they could do it is by depositing to Alameda bank accounts through the separate system called OTC.FTX.com and then transferring those to FTX.com.
JUDGE KAPLAN: Was there another way?
NISHAD SINGH: In December of 2019, an analogous system was set up, but directly on FTX. So customers could, on FTX, view wire instructions that they should send their funds to, and those wire instructions were for Alameda bank accounts.
JUDGE KAPLAN: Then how were those deposits reflected and where?
NISHAD SINGH: Those deposits were sent to Alameda bank accounts, and then the technical FTX system through use of -- through somebody observing the deposits into bank accounts, somebody would go and manually credit on the FTX system the corresponding user with the amount that they had sent to the bank account, and in that process what would happen under the hood is that fiat@FTX.com would go negative via the amount deposited and the customer's account would go positive via the amount deposited.
The net effect is, a customer sent $10 to an Alameda bank account. Somebody working for Alameda or FTX on the FTX system presses a button that credits the user on FTX with 10 virtual dollars and decrements fiat@FTX's.com balance by $10.
JUDGE KAPLAN: Which other FTX.com balance?
NISHAD SINGH: Fiat@FTX.com's balance.
JUDGE KAPLAN: That's the way it was supposed to work, right?
NISHAD SINGH: Right.
JUDGE KAPLAN: What was the bug?
NISHAD SINGH: The bug, which I think was introduced sometime in 2021, was that when a withdrawal was processed in a specific programmatic way, the customer's balance was successfully decremented, the funds were successfully sent through actual bank accounts, but fiat@FTX.com's like virtual balance was not successfully incremented.
JUDGE KAPLAN: So the apparent liability, from the point where the bug was introduced, owed by Alameda to FTX grew and grew. Is that right?
NISHAD SINGH: Yes.
JUDGE KAPLAN: And part of that balance was there because it belonged there and part of it was the result of the bookkeeping error by virtue of the failure to reflect the withdrawal from the customer account in the fiat@FTX account, yes?
NISHAD SINGH: That's exactly right.
JUDGE KAPLAN: Let's go on.
NISHAD SINGH: I am not sure who first identified it, but, in late 2021, I overheard a conversation between Gary and Adam Yedidia or Gary was explaining it to Adam.
NISHAD SINGH: Line 13 reflects what was literally in the fiat@FTX.com's like virtual balance. Line 14 is something that Gary added as a correction for the effect size of the bug until this point.
MR. ROOS: Judge Kaplan asked you about the fiat@FTX account balance being overstated. Where, if anywhere on the spreadsheet, does it reflect that number?
NISHAD SINGH: Negative 19 billion is an overstatement by the number in cell C14.
NISHAD SINGH: In row 14, C14.
MR. ROOS: With those two pieces of information, are you able to determine the correct fiat@FTX.com balance as of this date?
NISHAD SINGH: This correctly determines the total amount of customer deposits sent to FTX or Alameda bank accounts. There is one additional step that needs to be taken to find out how much had been sent to Alameda versus FTX bank accounts.
MR. ROOS: Just sticking on this for a moment, how can you determine what the correct balance in fiat@FTX.com is?
NISHAD SINGH: Summing these two numbers.
MR. ROOS: So summing those two numbers, what was the correct balance in fiat@FTX.com at the time?
NISHAD SINGH: About negative $11 billion.
NISHAD SINGH: It reflects that in banks, Alameda's or FTX, there should be $11 billion of fiat sent by customers.
MR. ROOS: Now, at the time of the conversation you had in June 2022 about the fiat bug, what, if any, involvement did you have in Alameda's banking?
NISHAD SINGH: None.
NISHAD SINGH: I believed it did, but I didn't know either way.
MR. ROOS: What was your understanding as to whether Alameda was allowed to use or spend the FTX customer fiat deposits it had received?
NISHAD SINGH: I didn't have an affirmative understanding, but using it would break common-sense expectations from customers.
MR. COHEN: Objection.
JUDGE KAPLAN: Sustained.
JUDGE KAPLAN: Ask another question.
NISHAD SINGH: Yes.
NISHAD SINGH: Negative $2.78 billion.
NISHAD SINGH: Yes. This is the main Alameda trading account.
MR. ROOS: How was it possible for Alameda to have a balance in its main account of negative $2.7 billion?
NISHAD SINGH: Alameda had a flag granted to them, a feature called allow negative, which by this point allowed them to be negative via withdrawing or transferring or trading arbitrary amounts, unlimited amounts.
NISHAD SINGH: Allow negative.
JUDGE KAPLAN: Let's just find out what he's talking about when we are talking about a flag. I don't imagine it's Don't Tread on Me.
NISHAD SINGH: It's a property of this account stored in the database. Flag means that it can either be true or false, and in this case this allow negative property for this account was true.
NISHAD SINGH: It's a feature.
JUDGE KAPLAN: It's a feature of the program, right?
NISHAD SINGH: Yes.
JUDGE KAPLAN: The same kind of feature that when you try to write a check on my bank account for a million dollars, the bank won't pay it, right? I haven't got a million dollars.
NISHAD SINGH: Same type of thing.
NISHAD SINGH: It allows you to withdraw more than your balance such that you can have a negative balance in the end without bound.
NISHAD SINGH: I wrote the first version of allow negative, which had meaningfully different abilities.
MR. ROOS: Before I ask you about the abilities, when you say you wrote it, what do you mean? What are you referring to?
NISHAD SINGH: Under Gary's and Sam's advisement and direction, I wrote the computer code that added this allow negative feature to the code base.
NISHAD SINGH: The python future code used as part of the FTX system.
NISHAD SINGH: FTX had a lot of code that it used to sort of run its technical systems. Code base is a term that encapsulates all of that code.
MR. ROOS: I want to be clear about something. Judge Kaplan asked you a question about where the flag was and your testimony was in the database. You just testified about the code. Are those the same things or different?
NISHAD SINGH: They are different.
NISHAD SINGH: The code defines how the system functions, depending on whether or not an account has the flag. The database shows and stores if an account has a flag.
NISHAD SINGH: It shows up as turned on for them in the database.
NISHAD SINGH: Initially, it allowed them to go negative up until they hit their collateral limit, but they can go negative in any currency until that point.
NISHAD SINGH: There were changes later in 2020, such that it could then go negative without any balance, so not bounded by its collateral limit, and there was a change added such that it would never be liquidated.
MR. ROOS: Let me ask you about each of those things. Starting with the last one, what do you mean by, it would never be liquidated?
NISHAD SINGH: Should I describe liquidation first?
NISHAD SINGH: Liquidation is the process of closing out an account that otherwise might end up under water. If an account is put on a bet that could lose by more than the account has collateral in it, it's the exchange's job to sort of close out that bet before that trade has lost more money than the customer initially deposited. It's a safeguard for the exchange and for other customers that, when executed well, prevents accounts from ever going negative, thereby dipping into other customers' assets.
MR. ROOS: And you testified that Alameda's account was exempt from that liquidation. What does that mean?
NISHAD SINGH: That Alameda could be in a position where it was liable to lose a lot of money and hurt other customers, or not just liable but well beyond that fact, had lost a lot of money or borrowed a lot of money such that it was taken from other customers without the system then taking any actions to close out their account or prevent that.
MR. ROOS: What were the other -- you listed them. But what were the other features that allowed negative -- maybe I'm using the word features too many times. What else did allow negative permit an account to do besides avoiding liquidation and going negative?
NISHAD SINGH: It allowed many means of arriving at a negative balance, such as withdrawing money that it didn't have, so any withdrawing such that it was very negative, transferring to others such that it was negative, trading such that it was negative.
NISHAD SINGH: Selling a Bitcoin when Alameda's balance was zero Bitcoins, so they would have negative 1 at the end of it.
MR. ROOS: When Alameda had a negative balance in its account and was withdrawing money, where did that money come from?
NISHAD SINGH: Other customers.
NISHAD SINGH: There is only a few sources of funds that comprise what's in FTX's wallets. There is FTX's revenue. Then there is customer assets less Alameda and there is Alameda assets. If Alameda's like stated ownership of an amount is zero and then they go and withdraw it, it must necessarily be coming from one of the other parts or both. For non-USD tokens, if FTX only made revenue in USD-like tokens, then it was necessarily coming from other FTX customers.
NISHAD SINGH: There are some tokens, like USDC, TUSD, that are stablecoins that are pegged to the dollar, and that in the crypto space are sometimes treated interchangeably with dollars.
NISHAD SINGH: A coin that holds its value at $1, one U.S. dollar.
NISHAD SINGH: Right.
MR. ROOS: When you participated in the creation of the allow-negative feature, what did you understand its purpose to be?
NISHAD SINGH: I was told it was for two purposes. It was for unifying a set of existing functionalities for accounts like Alameda accounts to go negative and for giving FTX staff the ability and a page to transfer locked forms of FTT to customers or to pay expenses.
NISHAD SINGH: The day of or -- as I was writing the code, so the day of or the day before, when I was instructed to write the code.
NISHAD SINGH: July 2019.
NISHAD SINGH: Sam gave me the project of making a page to allow transferring forms of FTT such that balances of the account that the transfer was coming from could end up negative. Gary suggested the specific implementation in details, including adding the allowed negative flag and sort of all the minutia of what that meant in the code.
MR. ROOS: Taking us back to June 2022 and the spreadsheet, what was your reaction when you saw Alameda had a negative $2.7 billion balance in its main account?
NISHAD SINGH: It seriously concerned me. This seemed like a real abuse of a feature that until this point I believed was serving FTX, not hurting it.
MR. COHEN: Objection.
JUDGE KAPLAN: Sustained.
NISHAD SINGH: It was inappropriate.
NISHAD SINGH: Does not meet the default expectations a customer would have, and I don't recall --
MR. COHEN: Objection.
JUDGE KAPLAN: Sustained. Excuse me. Overruled.
NISHAD SINGH: Should I continue?
JUDGE KAPLAN: Continue. A. Yes. And I don't ever recall it being stated to customers that their funds were being taken, and I remember affirmative descriptions from Sam and others that Alameda didn't have special treatment, and this would constitute a form of special treatment.
MR. ROOS: What led you to conclude that the negative 2.7 was, to use your word, abuse and not an allowed use of allow negative?
NISHAD SINGH: The allowed usage or the acceptable uses in my mind resulted -- were ones such that accounts would be negative for incidental reasons and in small amounts and then be shortly after -- would be topped off shortly after.
This is not a small amount. It does not strike me as incidental. I expected that this had been there for a while if it was this negative. And it sort of couldn't have been a mistake. This number, Alameda's main accounts balance, is a front-and-center number in all of Alameda's trading systems. It's the sort of thing from my time at Alameda I couldn't imagine being missed or ignored by anyone there.
NISHAD SINGH: There is a total that includes -- it is probably the result of a sum of column C, maybe absent a few lines.
MR. ROOS: If you just look at the top here, I am going to circle it, seeing that, do you know what the total refers to?
NISHAD SINGH: If there isn't something in D indicating to exclude a given row, then the sum is the corresponding value in column C.
MR. ROOS: Can we just scroll down and so the witness can see whether there is something in D.
Let's go back up.
NISHAD SINGH: It looks like it's just the sum, all the things that we see in column C.
NISHAD SINGH: USD values of the holdings in each of those accounts.
MR. ROOS: Now, in response to one of Judge Kaplan's questions you mentioned that there was a change in terms of which accounts were receiving money.
Do you remember that answer?
NISHAD SINGH: Yes.
NISHAD SINGH: Over the course of 2021 and early 2022, FTX started acquiring bank accounts and customer deposits and withdrawals are processed out of those, not the Alameda ones.
MR. ROOS: After FTX got bank accounts in its name, what did the balance in that fiat@FTX account reflect?
NISHAD SINGH: It reflected the total amounts that should have been in Alameda and FTX bank accounts on behalf of customers.
NISHAD SINGH: No.
NISHAD SINGH: They were responsible for the amounts that had been sent to Alameda bank accounts, and then the rest FTX was responsible for.
NISHAD SINGH: Sorry. I am not sure what you mean. Do you mind rephrasing.
NISHAD SINGH: Right.
MR. ROOS: What, if anything, was done to address the fact that Alameda was not responsible for the entire amount?
NISHAD SINGH: Adam, Andrea, and Gary went through an exercise with help of the fiat settlement team to determine what the right split was and then separate the liabilities, so they were recorded in separate areas.
NISHAD SINGH: Determine how much had been sent to Alameda bank accounts, how much had been sent to FTX bank accounts, confirm that there is some lined up with what was stated for fiat@FTX.com, and then split that fiat@FTX.com balance into two balances: One corresponding to what Alameda owed, one corresponding to what FTX owed.
NISHAD SINGH: Yes.
NISHAD SINGH: Sometime in the weeks or months after this June exercise where we discovered this bug.
NISHAD SINGH: I'm not confident. I believe -- I know that Adam ended up writing and executing a lot of the code. I know that Gary was very involved in it.
MR. ROOS: What's your understanding of what Adam Yedidia or others did to figure out the balance split?
NISHAD SINGH: I don't have an understanding affirmatively.
MR. COHEN: Objection.
JUDGE KAPLAN: If you don't have one, let's stop there.
NISHAD SINGH: No.
NISHAD SINGH: That it had happened, that there was in fact a split made, that fiat@FTX.com after the split represented the amounts that were in FTX bank accounts or that FTX was responsible for, and that there was a new subaccount created called FTX fiat old under the info@Alameda Research account that reflected how much Alameda was responsible for or should be in Alameda's banks.
MR. ROOS: Let's break your answer down there.
First, it wasn't clear to me. Do you know how much of the fiat@FTX.com liability Alameda was responsible for?
NISHAD SINGH: Yes.
NISHAD SINGH: I recall seeing that it was around $8 billion.
MR. ROOS: You testified that the amount of that fiat liability was split between two accounts. Can you explain what you mean?
NISHAD SINGH: Fiat@FTX.com was originally, or as of June we saw, like negative $11 billion. Alameda owed 8 of that. So if the split was done on that date, then the negative $11 billion in fiat@FTX.com would be reduced to negative $3 billion, and a separate account would be created under Alameda's account with the remaining negative 8.
MR. ROOS: To use your example, prior to the project, the total liability was 11 billion, is that right?
NISHAD SINGH: Yes.
MR. ROOS: The split happens. How much was determined to be -- how much was FTX determined to be responsible for?
NISHAD SINGH: I don't remember that number. I only remember Alameda's number.
NISHAD SINGH: $8 billion worth of fiat.
NISHAD SINGH: It was put into a subaccount of info@AlamedaResearch.com called FTX old.
NISHAD SINGH: Alameda employees could log into, like with a user name and password on the site, a high-level account called info@AlamedaResearch.com, but within it there were many subaccounts that had their own distinct balances. Subaccounts had names.
There is a new subaccount called FTX fiat old, whose balances didn't reflect Alameda's trading activity; just their share of this fiat liability.
NISHAD SINGH: All the obligations that Alameda had for customer fiat, customer fiat they should have been holding in banks.
MR. COHEN: Objection. Foundation.
JUDGE KAPLAN: Yes. I think so. Overruled.
NISHAD SINGH: What was left in the FTX -- the fiat@FTX.com was everything else, so amounts that should have been in FTX bank accounts.
MR. ROOS: The government offers Government Exhibit 647, which, according to stipulation S2002, is a screenshot of a part of the FTX database.
JUDGE KAPLAN: Received.
(Government Exhibit 647 received in evidence)
JUDGE KAPLAN: You may.
And hand out reading glasses.
MR. ROOS: Mr. Singh, I just want to start just by getting the lay of the land, ask you a few background questions of what we are looking at before we get into the details. OK?
First, what is the screenshot of?
NISHAD SINGH: This is the result of a query on the FTX database.
MR. ROOS: The first column -- maybe, Mr. Ahuja, can we zoom in on the heading and some of the numbers.
NISHAD SINGH: These are account IDs. We talked about IDs in the database earlier. These are the same ones, just for different accounts.
NISHAD SINGH: That is the account ID of Alameda's main trading account.
NISHAD SINGH: It describes the account that the transfer is sent from. This spreadsheet shows transfers acquired in the database.
MR. ROOS: In terms of the types of information in the database, are you able to view transfer transactions?
NISHAD SINGH: Yes.
NISHAD SINGH: It's a simple movement of money from one account to another. There is not necessarily a physical analogue. It's not that money is wired in the real world. It's just sort of a change of ownership of some amount of money in the FTX system.
MR. ROOS: Do you see where -- we looked at from-account ID, from-account user name.
Do you see the next one, to-account ID?
NISHAD SINGH: Yes.
NISHAD SINGH: It's the account ID of the account to which the funds were sent in each given transfer.
NISHAD SINGH: The user name of that destination account.
NISHAD SINGH: The time of the transfer.
NISHAD SINGH: Yes.
NISHAD SINGH: These are all descriptors of the asset transferred. They described the numerical ID in the database, the ticker or shorthand representation of that coin or asset, and then the full name of that coin or asset.
NISHAD SINGH: U.S. dollars.
NISHAD SINGH: Euro.
NISHAD SINGH: They describe the sizes of the transfer. The first column does so in units of the coin. The second column does so in dollar-equivalence units.
NISHAD SINGH: These are notes that are added to the transfer. The first two look to me like notes automatically added by the FTX system. All the other ones were added by a developer running the script.
MR. ROOS: For any particular transfer how do we read this, left to right, right to left, up to down?
NISHAD SINGH: Left to right.
MR. ROOS: Let's zoom in on the first transaction on August 17, so it's the third one down. This is not going to work, to zoom in on it that way. Why don't we start with just the first five columns and zoom in for that date, so row 3 -- that's fine.
NISHAD SINGH: The first row here describing a transfer made on August 17 of 2022 from info@Alameda Research.com/FTX fiat old to fiat@FTX.com.
MR. ROOS: Let's look at, just so can get it zoomed in, the rest of that row 3 from coin ID to the end of it.
NISHAD SINGH: Of euros in the amount of 339 million with notes attached called moving counterparty balances to different account.
MR. ROOS: What was the effect of the info@Alameda Research FTX fiat old subaccount transferring, to take the first one, that amount of euros to the fiat@FTX.com account?
NISHAD SINGH: The FTX fiat old account became that much more negative in euros, and the fiat@FTX.com account became that much more positive. If this was the amount that was determined that Alameda should have in its bank accounts for euros, now FTX fiat old after this transfer would correctly reflect the amount Alameda owed, and fiat@FTX.com would correctly reflect the amount that FTX owed.
MR. ROOS: Just to clarify, is money actually being transferred, or is it a bookkeeping entry, or something else?
NISHAD SINGH: This is bookkeeping. There isn't a physical wire that associates with it.
MR. ROOS: Zooming out, looking at all of the transfers that occurred on August 17, what was the combined effect of these?
NISHAD SINGH: The movement of lots of funds. Lots of liabilities shifted from fiat@FTX.com to FTX fiat old.
MR. ROOS: I think said earlier that the end result was that this info@Alameda Research FTX fiat old account had approximately a negative $8 billion balance?
NISHAD SINGH: Correct.
NISHAD SINGH: It, as an accounting account, had the allow-negative flag, which allowed it to be unboundedly negative.
NISHAD SINGH: Without bound. It could go negative without consequence or limits.
MR. ROOS: After the fiat balance, the negative fiat balance was assigned to this Alameda subaccount, what happened?
NISHAD SINGH: I was -- I noticed it at some point.
NISHAD SINGH: Jayesh had asked me to pull some FTX revenue stats from the database. In doing so, I observed that one line item for revenue, line of interest fees, had spiked dramatically, from like $200,000 to 800,000. I dug into why it had done so and identified that the marginal $800,000 lined up with one bip, which was a rate charged to the additional negative $8 billion now housed in Alameda's main account.
(Continued on next page)
BY MR. ROOS:
MR. ROOS: All right. So a few follow-ups.
First, when was it that you saw Alameda Research was being charged more interest on its accounts?
NISHAD SINGH: I don't remember the exact date, but I——I think July or August.
MR. ROOS: You mentioned this was related to a conversation with someone named Jayesh. Who is that?
NISHAD SINGH: Jayesh was the head of finance for FTX.
MR. ROOS: Okay. And could you explain how it was that this account was being——or withdrawn.
Can you explain why it was that this account was accruing interest.
NISHAD SINGH: There was a system in place to charge Alameda and other accounts with lines of credit, if configured, for their used line of credit. This considered negative balances. As part of moving fiat@ftx.com, part of that amount, into FTX fiat old, there was an additional negative $8 billion in one of the Alameda high-level accounts, and so that was considered as part of what was the used line of credit and they were now being charged interest on it.
MR. ROOS: I'm going to ask you some more questions about line of credit in a bit, but just at a high level, what is a line of credit?
NISHAD SINGH: It's a nonwithdrawable dollar amount that's granted to allow for easier trading without actually having to deposit as much money.
MR. ROOS: And why was this $8 billion negative balance on the FTX fiat old account being charged interest as a line of credit?
NISHAD SINGH: Because it contributed to total negative balances in all subaccounts of this user, which was one of the factors considered when determining how much of Alameda's granted line of credit was used and therefore charged interest on.
MR. ROOS: Now what, if any, conversations did you have with the defendant about the charging of interest on this account?
NISHAD SINGH: I brought this up with him. I said, it looks like after the splits that Adam and Andrea did of FTX versus Alameda fiat liabilities, they put it inside a subaccount that's contributing to the amount that Alameda is charged in interest.
NISHAD SINGH: He said that seemed incorrect, in theory those balances are in banks, it's not something that they're borrowing in sort of the traditional sense, they're custodying it, so they shouldn't be charged interest, let's move as a liability out of a location where it's being charged interest.
NISHAD SINGH: I followed his instructions. I asked a group with a bunch of Alameda FTX and traders——Alameda traders and developers and FTX developers if there was an account that I could move this to that they were tracking so they wouldn't lose track of it such that it was——such that it wouldn't be charged interest anymore, and I believe one of Terence Choo and Caroline Ellison gave me the name of the account to move it to.
NISHAD SINGH: This was in Signal. At the very least it included me, Gary, Adam, Andrea, Sam, Terence Choo, and Caroline Ellison. I believe it also had other Alameda traders and FTX developers.
NISHAD SINGH: Yes.
NISHAD SINGH: I moved it to the account that I was given by the Alameda traders, one called seoyuncharles88@gmail.com.
MR. ROOS: Could we please publish what's in evidence as Government Exhibit 645.
And could we zoom in on, just to make it a little larger, how about the first three columns.
NISHAD SINGH: These show the subaccounts under the seoyuncharles88@gmail.com account. The first column is an account ID. We've talked about that some. The second column described the ID of the user that the subaccount is housed under. So in all cases it's the seoyuncharles88 account. And the user name describes the——like the label for the account, which is only generated at the time that the account is created.
MR. ROOS: So looking at the user name, at the last one on this list, is that the same user name as the one we saw on the last exhibit?
NISHAD SINGH: Yes.
MR. ROOS: And why is that user name for that subaccount now associated with seoyuncharles88@gmail.com?
NISHAD SINGH: The user name says inputalameda-research.com because it was Adam or Andrea made the subaccount under info@alameda-research.com. It now shows it being associated with seoyuncharles88 because at instruction, I moved its ownership from inputalameda-research.com to seoyuncharles88.
MR. ROOS: What was the result of moving this subaccount to be under seoyuncharles88@gmail.com account?
NISHAD SINGH: My understanding is that the——Alameda continued to track the liability as it had——no change there——but that interest was no longer being charged on this amount.
MR. ROOS: And how, if at all, was the defendant involved in the movement of this subaccount to the seoyun account?
NISHAD SINGH: He instructed me to make the movement, and he was in the chat in which a trader told me which account to move it to.
JUDGE KAPLAN: No. I think we could use a break.
JUDGE KAPLAN: 2:00, members of the jury.
COURT CLERK: Will the jurors please come this way. Bring your notebooks with you. All rise.
(Luncheon recess)
AFTERNOON SESSION 2:07 p.m.
(In open court; jury present)
JUDGE KAPLAN: The jurors and the defendant all are present, as they have been throughout.
The witness is reminded he's still under oath.
Mr. Roos, you can continue.
BY MR. ROOS:
MR. ROOS: I want to change topics and talk to you about futures trading and collateral.
Did FTX allow customers to trade cryptocurrency futures?
NISHAD SINGH: Yes.
NISHAD SINGH: It's a product that customers can buy such that if it goes up, they'll make money, or short, that if it goes down, they'll make money.
NISHAD SINGH: It's a product, a financial product, that eventually resolves the price of a Bitcoin and so users can bet on Bitcoin by trading it.
NISHAD SINGH: At some point the future will expire. When it does, it will be——every——every future that is purchased will turn into the price of Bitcoin at the time of expiry.
NISHAD SINGH: You would buy the future.
NISHAD SINGH: The Bitcoin future.
NISHAD SINGH: You'd short the future, or sell it.
NISHAD SINGH: From day one.
NISHAD SINGH: Customer had to deposit collateral.
NISHAD SINGH: Real liquid funds that the customer owned used as safety buffer such that if they lose money, the customer can get liquidated, their positions closed, before they lose the entirety of their collateral.
NISHAD SINGH: Liquid funds, things like dollars or Bitcoin or other tokens.
NISHAD SINGH: Yes.
NISHAD SINGH: Some forms of collateral, everything that wasn't just US dollars or other forms of fiat, had a haircut applied to it, meaning that if, you know, one Bitcoin was worth $20,000, it may only contribute $18,000, say, towards their effective collateral.
NISHAD SINGH: On the exchange.
NISHAD SINGH: Customers had to deposit their collateral.
NISHAD SINGH: To FTX.
MR. ROOS: And you mentioned liquidations, and you talked about that in the morning. What happened if a customer, for example, was shorting Bitcoin and they started to lose money?
NISHAD SINGH: If a customer was losing enough money——money——enough money that it approached the value of their collateral, so say if they had a thousand dollars of collateral and they had lost $600 in trading, there would be some point, maybe, you know, when they lost 700, at which——when FTX would liquidate the customer, closing their positions, as in selling off whatever futures bets they had made, hopefully——with a goal that they wouldn't lose the remaining $300.
NISHAD SINGH: Yes.
NISHAD SINGH: A clawback is a mechanism for resolving any losses that arise from a liquidation. And by losses here, I mean instances in which the account being liquidated ends up negative. So you could imagine that somebody has——same thing——a thousand dollars of collateral, they make a bet, and before the liquidation is complete, their futures position has actually lost $1,001, so they've lost more money than they ever deposited in collateral. There's negative $1 around to resolve. One way of resolving this is through a clawback, a system in which that 1 dollar is——that loss is sort of socialized, so it's called, across a bunch of other users, as in everybody else pays.
NISHAD SINGH: No, not that I'm aware of.
NISHAD SINGH: Yeah, I brought this up with Sam and Gary at some point when I discovered it. Clawbacks weren't even implemented.
NISHAD SINGH: That the code could never cause a clawback.
NISHAD SINGH: Even in instances in which a customer account ended up negative and the insurance fund, which is a sort of bailout pool of cash, was empty, the expected option for resolving the negative balance would be a clawback, but there was nothing in the code that would do that. Instead, the account would remain negative and——and Sam and Gary or others would sort of manually handle it however they saw fit.
NISHAD SINGH: Yes.
MR. ROOS: You testified a moment ago that futures trading typically required collateral. What, if any, conversations did you have with the defendant about the collateral Alameda had to support its trading, its futures trading?
NISHAD SINGH: I had a discussion in September, early September, about this.
JUDGE KAPLAN: What year?
NISHAD SINGH: 2022.
NISHAD SINGH: That historically, according to a project that I'd run, like a batch historical data, there were points when Alameda's main account had not nearly enough collateral if you did not include their enormous line of credit.
MR. ROOS: Okay. So let's start with the timing of this conversation. Do you remember approximately what date it occurred on?
NISHAD SINGH: Yeah. I believe it was either like August——sometime between August 31st and September 2nd.
NISHAD SINGH: I wrote a script that would emit for each day Alameda's total position size, as in the USD equivalent of how many——how much they had on in futures positions, the total collateral they had in the system, and how much collateral was needed to support their positions. From these, I could determine how——how much collateral they didn't have, and so how much of their line of credit in their main accounts they were using.
MR. ROOS: And so before we talk about line of credit, what did you determine about how much collateral they didn't have?
NISHAD SINGH: There were points when, using just their deposits, not their line of credit, Alameda had around $10 billion——they were like on——$10 billion short of what they needed to be.
MR. ROOS: Now you've mentioned line of credit a few times. For starters, what is a line of credit?
NISHAD SINGH: In the context of FTX, it's an amount that is granted to the customer, it's not withdrawable, but it contributes towards what FTX considered to be their collateral, meaning that customers could trade using that line of credit as if they had deposited funds but without actually having done so.
NISHAD SINGH: It's not the same.
NISHAD SINGH: It's——if there's——there aren't physical assets backing, there's just trust.
NISHAD SINGH: An enormous one.
NISHAD SINGH: By the end, it was $65 billion.
NISHAD SINGH: Significantly larger.
NISHAD SINGH: Other customers, if memory serves, had lines of credit on the order of hundreds or tens of millions of dollars.
MR. ROOS: As far as you knew, was it publicly known outside of Alameda——sorry——outside of FTX that Alameda had a $65 billion line of credit?
NISHAD SINGH: Not that I know of. I don't think it was known.
MR. ROOS: So circle back to your conversation with the defendant on September 1st or 2nd. After you told him that Alameda did not have enough collateral in FTX without its line of credit, what, if anything, did he say?
NISHAD SINGH: His first question was if I was including all of Alameda's other subaccounts and accounts on the system. I responded no, the purpose of this exercise was just for evaluating Alameda's main account, the one we've seen with account ID 9. Sam came back to me sometime later and asked if I could transfer in the Serum that I, Gary, Caroline, and Sam personally held into Alameda's main account, at some historical time, to make it appear that Alameda always had more collateral than it did.
NISHAD SINGH: Serum is a cryptocurrency that Sam and Gary created.
NISHAD SINGH: We, like other employees, bought a lot of it at Serum's genesis. Sam decided how much everyone could buy. I think everyone bought the maximum allotted amount.
NISHAD SINGH: It would mean——like mechanically, you mean?
NISHAD SINGH: Yeah. Making a transfer, like the ones we've seen in the FTX database, but backdating it, making it appear as though it happened earlier so that it looked as if the funds had been there for a long time.
MR. ROOS: You used the phrase earlier in your testimony "a historical time." What did you mean by that?
NISHAD SINGH: Some previous time, sometime before Alameda had, you know, $10 billion less than it should have, or it was using $10 billion of its line of credit.
NISHAD SINGH: To make it appear as if Alameda did have sufficient collateral to fool the eventual targets of——the eventual——
MR. COHEN: Objection.
JUDGE KAPLAN: What's the objection?
MR. COHEN: To the latter part of the answer.
JUDGE KAPLAN: Overruled.
BY MR. ROOS:
NISHAD SINGH: I understood the purpose to be to fool the eventual recipient of this——this, like, data that I was collecting, which was the CFTC.
NISHAD SINGH: Blanking on the first letter.
MR. ROOS: If you don't remember what the acronym is, can you just tell what you understand the agency to be or what the acronym stands for?
NISHAD SINGH: Commodities and futures trading commission, possibly.
MR. ROOS: Now this transaction you testified about, can you walk——can you describe how it would have changed that negative $10 billion number.
NISHAD SINGH: All right. So it would have made it look like Alameda's main account held much more Serum than it actually did. But the Serum was actually, you know, in locked form. It would be locked Serum. That's what we had, locked Serum by default, because it isn't liquid, it can't be sold, was not something that FTX considered to be contributing to collateral. And so implicit in Sam's request was to also adjust the rules about what I was computing as collateral to include this locked asset. It would make it eventually appear as if Alameda was using a lot less of its line of credit, not $10 billion.
MR. ROOS: And how, if at all, would this have affected Alameda's line of credit that you were talking about?
NISHAD SINGH: Do you mind clarifying the question.
MR. ROOS: You said this was in the context of a conversation about collateral and lines of credit. How, if at all, did including this Serum affect the line of credit issue?
NISHAD SINGH: It didn't change anything about the line of credit directly. What it did was it would have adjusted my calculation about how much of it was used since any amount of collateral held was necessarily counted against what was, you know——it wasn't——that's an amount that wasn't drawn from the line of credit and wasn't used from the line of credit.
NISHAD SINGH: I didn't.
NISHAD SINGH: It felt wrong. I mean, I was fine giving up my personal assets. I'd taken on debts and given up my assets for the company countless times. But I understood the purpose of this exercise to be, you know, to fool a US regulator and to fool employees of the company, and I wasn't comfortable with that.
MR. ROOS: While we're on this topic of line of credits, I want to ask you a few follow-up questions.
To be clear, did most customers on FTX have lines of credit?
NISHAD SINGH: Not most.
NISHAD SINGH: The EIT users, sometimes those were individuals, but oftentimes they were trading firms, large trading firms.
MR. ROOS: And apart from Alameda, did any customers have lines of credit in the range of a billion dollars or more?
NISHAD SINGH: I don't recall what the largest one was outside of Alameda by the end of FTX, but I know that at some point in 2022 when I inspected them, there weren't any that were over a billion dollars except for Alameda's.
MR. ROOS: At this time the government offers Government Exhibit 5, which, according to a stipulation marked S2003, is a spreadsheet titled locs, dated September 5, 2022.
JUDGE KAPLAN: Received.
(Government's Exhibit 5 received in evidence)
MR. ROOS: Mr. Singh, I want to ask you about a few of the numbers on this spreadsheet before you, okay?
NISHAD SINGH: Okay.
NISHAD SINGH: Yes.
NISHAD SINGH: Yes.
MR. ROOS: So reading in those two columns, do you see row 2, where it says info@alameda-research.com?
NISHAD SINGH: Yes.
NISHAD SINGH: Right. It's north of 65 billion.
NISHAD SINGH: Yeah.
NISHAD SINGH: This is——this matches my recollection of what the line of credit was for, for Alameda's account.
NISHAD SINGH: 150 million given to Genesis Capital.
NISHAD SINGH: So I don't——I didn't see this spreadsheet while I was at FTX and I don't know how all the values were computed, but——
MR. COHEN: Objection.
JUDGE KAPLAN: The document speaks for itself, counsel.
NISHAD SINGH: Yes.
NISHAD SINGH: It's the sum of——
MR. COHEN: Same objection.
JUDGE KAPLAN: Sustained.
MR. ROOS: Can I just have him read the number into the record. That's actually all I was going for.
JUDGE KAPLAN: You've got it highlighted, and the jury is looking at it there.
BY MR. ROOS:
MR. ROOS: Picking up on something you said a moment ago, this document that lists that 65 billion number and this negative 5 billion number, did you see this while you were at Alameda?
NISHAD SINGH: No, nor while at FTX that I recall.
MR. COHEN: Objection.
NISHAD SINGH: Yes.
JUDGE KAPLAN: Sustained.
NISHAD SINGH: A lot of familiarity.
NISHAD SINGH: I've seen his writing and writing process many times over our five years working together.
NISHAD SINGH: All the time.
NISHAD SINGH: Yes.
NISHAD SINGH: I do.
MR. COHEN: Objection.
JUDGE KAPLAN: Did you say (d) or (b)?
JUDGE KAPLAN: Thank you.
I think you need a better foundation than you have.
BY MR. ROOS:
MR. ROOS: Were there any——you testified a moment ago that you reviewed spreadsheets written by the defendant. Were there any distinctive characteristics about how he wrote spreadsheets?
NISHAD SINGH: There were.
NISHAD SINGH: They were rarely ever color coded; they frequently exhibited some sort of casualness about naming and structure; they rarely had capital letters; they usually, my recollection, often had data on the left and summaries of that data on the right, as opposed to like further down.
NISHAD SINGH: If——if they were like pulled from a data source, they might include like the full description of the account or login. Else they would refer——you'd often have shorthand that——that Sam used.
NISHAD SINGH: Yes.
MR. COHEN: Objection.
JUDGE KAPLAN: Overruled.
NISHAD SINGH: I do.
NISHAD SINGH: The first belongs to Sam.
JUDGE KAPLAN: No, no, no, no, no. You're just reading from the document now.
JUDGE KAPLAN: Fair enough. Okay. Go ahead. A. The first belongs to Sam, the second to Caroline, the third to Gary, the fourth to me. To clarify, when I say belongs, my——mine and possibly Sam's and Gary's weren't like beneficially owned by us. They were admin accounts to be used on the system.
NISHAD SINGH: I do.
NISHAD SINGH: Sam's.
MR. COHEN: Objection.
JUDGE KAPLAN: Members of the jury, it's ultimately up to you to decide whether this document was written by the person who the witness is going to identify. There's enough here so that I've concluded you're entitled to make that judgment one way or the other.
Okay. Overruled. A. Forgive me. This isn't a question that you asked, but another distinctive characteristic——
MR. ROOS: No. I think there was a pending question. There was an objection, I think your Honor overruled, so I think you have to answer the question.
JUDGE KAPLAN: Yes. And I think he answered before, or at least before the reporter got Mr. Cohen's objection. Whether that was temporally right or not, I don't know, but he answered.
BY MR. ROOS:
MR. ROOS: Now you said that you did not see this spreadsheet at the time. Did there come a time when you later learned some of the information?
NISHAD SINGH: Yes.
NISHAD SINGH: Yes.
NISHAD SINGH: Sam sent a Google Doc over Signal to me and Gary titled "We came, we saw, we researched." It laid out a case for shutting down Alameda, citing that Sam didn't have faith in its——the competency of its leadership without him more involved, and that the PR cost with both FTX and Alameda coexisting was high.
NISHAD SINGH: A Google Doc.
NISHAD SINGH: "We came, we saw, we researched."
NISHAD SINGH: I read most but not all of it.
MR. ROOS: After reading the document what, if any, proposals did you make with respect to Alameda?
NISHAD SINGH: It occurred to me that the cost, the cost that Sam cited was Alameda and FTX coexisting; really the cost is Alameda existing on FTX, and so I proposed shutting down Alameda on FTX as opposed to shutting down Alameda entirely.
NISHAD SINGH: I remember I listed out what I believed the requirements would be in the chat. We'd have to close a bunch of illiquid markets that Alameda was primarily market making on. They were not a significant market maker overall, but there were some markets where nobody else bothered to trade. We'd have to revamp how the OTC system worked——over-the-counter trading. Alameda was sort of plugged in as the only provider for those trades, but that could have been——that could have been, you know, given to a pool of market makers. We'd have to have Alameda close out all of its accounts, return everything that it was negative in, like that main account that was negative 2.8 billion, withdraw everything that it was positive in. Maybe a few other things. But those are some big ones.
MR. ROOS: So let me ask you a few questions about closing out Alameda on FTX.
For starters, by this time, September 2022, to what extent was Alameda's presence on FTX necessary for market making?
NISHAD SINGH: Not very.
NISHAD SINGH: There was a time when Alameda was in some 20, 30 percent of trades. By 2022, or at least by a point in 2022, Alameda was only a party to like some 2 percent of trades or thereabouts. Alameda was not nearly as significant a player as it used to be on the platform. The ways in which it was involved that still provided value to the exchange were replaceable for——or not so important that it was necessary.
NISHAD SINGH: I don't know all the details of how it did its market making, and it's possible that it like availed of "Allow Negative" in some way, but fundamentally, no, I don't think that to perform the duties that were more important of it, it needed all the things that "Allow Negative" granted.
NISHAD SINGH: They were never needed for it. My belief is that they were doing it out of convenience in the beginning. Certainly once FTX had grown, it had enough staff, those staff could just manage the stablecoin creations and redemptions.
MR. ROOS: You mentioned that Alameda would need to close out its accounts. What did you mean by that?
NISHAD SINGH: Alameda had many accounts on FTX. Like we'd seen with that other spreadsheet, some of them were big positive numbers, some of them big negative numbers. Each of those has underlying numbers for, you know, balances of specific coins. Closing out means making every one of those numbers zero, by depositing any amounts that are negative and withdrawing any amounts that are positive.
MR. ROOS: So after you proposed shutting down Alameda on FTX, what, if anything, did the defendant say?
NISHAD SINGH: I first proposed it inside the chat with myself, Gary, and him, and asked if I could share it with Caroline to talk about its viability. Sam said "not crazy." His way of——
JUDGE KAPLAN: He said what?
NISHAD SINGH: "Not crazy." He used "not crazy" to greenlight a proposal without fully endorsing it.
MR. ROOS: Did you ask Caroline Ellison about the viability of shutting down Alameda trading on FTX?
NISHAD SINGH: I did. I sent a message inside the hashtag organization Signal group, which had me, Gary, Caroline, and Sam. I said: The PR costs of having Alameda on FTX seem really steep. I'm thinking about if it's possible to have Alameda shut down on FTX. Here are some six things I think that would take.
NISHAD SINGH: Public relations cost, that there was a lot of worry and fear in the crypto ecosystem about conflicts of interest between Alameda and FTX.
NISHAD SINGH: She said——and I believe verbatim——"That's impossible."
NISHAD SINGH: I said: Which part of it? I was pretty alarmed. And I was hoping it wasn't the part about closing out accounts.
NISHAD SINGH: That it was the part about closing out accounts.
NISHAD SINGH: Me, Gary, Sam, Caroline.
NISHAD SINGH: At this point Gary said Alameda is borrowing 13 billion from FTX.
NISHAD SINGH: I was really hoping that I misunderstood, and I called for a meeting immediately.
NISHAD SINGH: I was really afraid.
NISHAD SINGH: The June exercise, I thought Alameda had positive balances on FTX, that it was borrowing lots in some places but that overall they had more money than they didn't. This suggested an entirely different reality. I was hoping that I didn't really understand what Gary meant by borrowing, but if I did, this was absolutely devastating.
MR. ROOS: And how, if at all, did Alameda's borrowing $13 billion from FTX affect FTX customer funds?
NISHAD SINGH: The borrowing had to have been from customer funds in large part because FTX itself didn't have——like, didn't own that much money.
MR. ROOS: How, if at all, did the defendant react when Caroline Ellison said Alameda has——I'm sorry——when Gary Wang said Alameda was borrowing 13 billion from FTX?
NISHAD SINGH: I was sitting next to Sam at the time. We were in the office. So I got some real sense. He seemed unsurprised and made up what I understood to be a false excuse for dodging the meeting.
NISHAD SINGH: Yes.
NISHAD SINGH: Just Gary and Caroline because Sam didn't come.
MR. ROOS: What was your belief at this point as to whether Alameda could repay the $13 billion it owed?
NISHAD SINGH: Before the meeting I was really hoping that I misunderstood what had been said and that Alameda could in fact close out and repay what it owned. After the meeting I was significantly less hopeful.
NISHAD SINGH: That evening.
NISHAD SINGH: On the balcony of the Orchid 6 penthouse where we lived.
NISHAD SINGH: Sam and I almost never met; very, very rarely. I knew this needed to be really private. I figured that if we went to our two most common spaces to talk, which were my room or in the office, that both of those were very frequently used by other people for meetings and that others could stumble in on us, and I knew that there was something really serious going on and I didn't want people stumbling in.
NISHAD SINGH: Evening into night.
NISHAD SINGH: This is the balcony that we met on.
NISHAD SINGH: I was pacing behind where these baskets on the left are. Sam was reclined on one of the white like chaise chairs behind that.
NISHAD SINGH: Hour, hour and a half.
MR. ROOS: Let me ask you a few questions about the conversation.
First, how did the conversation begin?
NISHAD SINGH: I said: Caroline's really freaked out about the NAV situation and so am I. NAV, by the way, means net asset value, which was——I wasn't very fluent in financial terms. This was my crude way of referring to the hole.
NISHAD SINGH: The fact that Caroline had suggested that Alameda couldn't return its borrows, that meant that there was, in my lingo, a hole, a deficit of customer funds.
MR. ROOS: What, if anything, did the defendant say in response to your initial comment that you and Caroline Ellison were freaking out?
NISHAD SINGH: He said: I'm not sure what there is to worry about. NAV is fantastic by almost any measure. It was super positive even if you don't include FTX and FTX.US equity.
NISHAD SINGH: Yes.
NISHAD SINGH: I said next: Well, what about what Caroline said today and Gary said today, that there's 13 billion borrowed and we can't pay it all? Sam said: Right, that. We are a little short on deliverable.
NISHAD SINGH: Assets that can be delivered to customers as opposed to illiquid assets.
NISHAD SINGH: I asked: How much is it short by? Sam said: That is the wrong question to be asking. The right question is how much can we deliver, and in 24 hours, if pressed, I think we could deliver around $5 billion; given some more weeks, substantially more; given some more weeks after that, substantially more.
MR. ROOS: Now what, if anything, did the defendant say about how this had been affecting him over the prior year?
NISHAD SINGH: He did describe it. I said something like "Jesus F'ing Christ." Sam said: Yeah, this has been taxing me some 5 to 10 percent of my productivity for——and he either said for this year or like for this calendar year or since before the last year. I said: I think this is going to be doing a lot more damage to me, hitting me a lot harder. Sam said: Yeah, I was worried about this. In hindsight, it might have been a mistake for me to circulate that document this morning. People are thus going to freak out. I said: I understand it's not productive to respond emotionally.
MR. ROOS: What, if anything, did you discuss about a plan for addressing Alameda's negative balance?
NISHAD SINGH: I asked what the hell the plan was, what are we going to do. Sam said he's not too worried and he described a number of sort of strategies that we could pursue in parallel going forward.
NISHAD SINGH: He described selling off Alameda's illiquid but, according to his estimation, valuable assets, and properties; he described, for the ones that weren't sellable but generated revenue, making sort of low-hanging changes to make them more profitable; he discussed raising from investors, selling FTX equity; and he discussed making FTX——oh, he said that FTX.US futures, which we believed would come online, you know, any day now, would be a boon to the company, and would be great for revenue and for its valuation, and that there were many engineering projects that were crucial and were themselves very valuable.
NISHAD SINGH: Yes.
NISHAD SINGH: I asked if now, Sam would take seriously cutting expenses or——and curbing them going forward. He said yes, definitely, he's working with that——working on that with Ramnik.
NISHAD SINGH: I was blindsided and horrified. I felt really betrayed, that five years of blood, sweat, and tears from me and so many employees, driving towards something that I thought was a beautiful force for good, had turned out to be so evil. I knew that customers were betrayed. So many customers had to put their trust in us. And, you know, according to Sam's take, chances to rebuild this hole depended enormously on me continuing to try to make the company successful, and I knew that would require me betraying customers and employees.
NISHAD SINGH: Every day.
NISHAD SINGH: How could I live with myself if my departure precipitated a fall that might have been unavoidable——or might have been avoidable.
MR. ROOS: After your conversation with the defendant on the balcony, what steps, if any, did the defendant take with respect to raising money for the company?
NISHAD SINGH: He followed through on the plan that he discussed in that——
MR. COHEN: Objection, foundation.
JUDGE KAPLAN: Sustained.
NISHAD SINGH: In that conversation on the balcony, Sam——I had asked to get more details on prospects and plans regarding raising money from investors. Sam had mentioned that he was planning to go to New York in two weeks with Ramnik, and in a month, from the conversation, he was planning on going to the Middle East with Ramnik and Scaramucci.
NISHAD SINGH: I think Anthony is his first name. He was the press secretary or chief of staff for Trump for some time and runs a VC firm, I think.
MR. ROOS: And after your conversation on the balcony, what, if anything, did you observe about whether these trips took place?
NISHAD SINGH: They took place.
NISHAD SINGH: Yes.
NISHAD SINGH: Sam arrived back from the Middle East in the middle of the day on a weekday, came into the office, and attracted a crowd, like he often does. Sam was regaling everybody with stories of the Middle East and how successful it was and talking about how it's turning a corner and being more progressive culturally and so on.
NISHAD SINGH: Yes.
NISHAD SINGH: I asked him if we could meet again privately. Again, this was an exceedingly rare thing. I did this like less than once a year on average. But I wanted to know what the real deal was with prospects for the raise.
NISHAD SINGH: We did, in his apartment in Gemini 1D.
NISHAD SINGH: I started by saying: I'm really not doing well, I thought I might quit, in that conversation. I kind of wanted to put him on notice. I asked: How is it going with NAV? What's the plan? Any updates? I was standing in the living room area, right behind the counter to his kitchen. He was in the kitchen with his back up against the fridge. He described for me in some real detail what the Middle East trip was like and what prospects were from raising——for raising from various investors there.
NISHAD SINGH: He said that we can make——it's still possible that nothing comes out of this deal, that $0 could be raised, but that we could also come out of this with another $5 billion.
MR. ROOS: So 5 billion is not 13 billion. What, if anything, did you discuss about the difference?
NISHAD SINGH: I said: I'm really happy to hear we can pull up that much, but, like, oh, my god, we have a lot left. What's the plan? Like, tell me you've got some updates. Sam said: The main line plan remains, making FTX successful and growing it, and that depends on a huge part in you. You're one of the few people, Nishad, that can take that kind of work off my plate so I can focus on the rest of this.
NISHAD SINGH: I was really afraid to ask for a conversation, and I think my fears kind of bore out. Sam was on edge, and I felt he was very mad at me for talking about this, and it was tense. There were long periods of silence. Sam has a——some physical twitches for when he gets angry.
MR. COHEN: Objection.
JUDGE KAPLAN: Strike the last sentence.
JUDGE KAPLAN: It's unresponsive to the question.
BY MR. ROOS:
MR. COHEN: Same objection.
JUDGE KAPLAN: Overruled.
NISHAD SINGH: Sam has some physical tells for when he is thinking hard or is upset, and a lot of those were on display.
NISHAD SINGH: Puffed out his chest, had his hand back, hands back, he was grinding his finger, closing his eyes, grinding his teeth or tongue in his mouth, and when he opened them to respond, he would sort of glare at me with some intensity. This didn't happen for the whole conversation, but it did happen at specific points, like when I asked, like, Dear god, what else is there? Give me some updates. I ended up apologizing to him at the end for asking for the meeting because I could tell it was so unwelcome.
MR. ROOS: Now you testified about cutting expenses. Withdrawn.
You testified about, during the conversation you had on the balcony, a portion of the conversation about cutting expenses. I want to ask you some follow-up questions about expenses in the fall of 2022, okay?
NISHAD SINGH: Okay.
NISHAD SINGH: In some ways I was pleasantly surprised. I really pushed for a number of large items to be cut, and I think I was successful in cutting maybe a couple hundred million dollars of spend. But there was also a point——there were a couple of points when I felt like our real obligation to be doing so was not being taken seriously and that it was much, much more that was either cuttable or at least strongly curtailed, that Sam simply wasn't cutting.
MR. ROOS: Now after the conversation with the defendant about the $13 billion hole, what, if any spending did you speak to him about specifically?
NISHAD SINGH: I spoke to him about various endorsement deals, spoke to him about reversing the AZA acquisition, spoke to him about reversing the Embed acquisition, spoke to him about canceling the kind of disgusting FTX office plans——it was going to be a big F——that cost——at first I heard 50 million, eventually 250 million.
NISHAD SINGH: I forgot what it stands for, but it's a payments company that FTX had——was some part of the way through acquiring, but I believe was still a reversible transaction.
NISHAD SINGH: Embed is a company that FTX.US acquired at Brett Harrison's behest to list FTX.US stocks.
MR. ROOS: In September of 2022, did you have any disagreements with the defendant about spending?
NISHAD SINGH: Yeah.
NISHAD SINGH: You said in September?
NISHAD SINGH: In one instance, I saw that spreadsheet we looked at earlier that Jayesh showed me that had outlays——that described outlays of future spend on endorsement deals. I was really upset about that. There were way more than I knew about. Many of the numbers are much bigger than what I'd been told. And there was like a billion dollars headed out the door. If FTX was making a billion dollars a year, this puts us like a year of revenue behind with a hole. And so I approached Sam and said: You know, this is crazy. We need to cut as much of this as we can. I thought you were on this.
NISHAD SINGH: He said he didn't think that these were bad spends, and he sort of like challenged me to point to one that was worth cutting. I did point to a couple. And for the ones I pointed at, he agreed that they were bad, but he said that those weren't his fault and that everybody proposing cutting them was shortsighted because the cost associated with cutting them was about like 70 percent of the cost of seeing them through and so it wasn't worth it.
MR. ROOS: Was there any other spending that you had disagreements about in September 2022 to November 2022?
NISHAD SINGH: There are the others I mentioned, AZA and Embed.
NISHAD SINGH: There was a point when Sam was in the Middle East, he sent a message to a Signal group called hashtag meetings, or hashtag groups, which contained a lot of folks in leadership——maybe some eight or ten of them——basically pitching that FTX do a deal with Telegram.
NISHAD SINGH: Yeah, Sam described that FTX could build a payment-processing service for Telegram and that Telegram would give us a lot of TON, which was their coin, some hundreds of millions of dollars' worth. Seemed like a huge win, wasn't a big lift to build this payment service, probably, and we get a lot of money for it. Ramnik clarified that we'd also pay $120 million for it.
NISHAD SINGH: Made me extremely nervous. Getting even longer random illiquid tokens was not something I was excited about, especially when the cost would come from customers.
NISHAD SINGH: Spending dollars, spending anything, after September was necessarily digging the customer deficit hole deeper.
NISHAD SINGH: FTX was short on funds to give to customers. Alameda owed that back. If either FTX or Alameda was spending liquid funds to acquire more illiquid stuff that was not for customers, that was necessarily spending customer funds, not for customer benefit.
MR. ROOS: When you responded to this potential Telegram deal, how did the defendant respond, if at all?
NISHAD SINGH: Yeah. To clarify, in the larger group, I wasn't transparent about my worry that this was digging into customer funds. Not everybody knew about it. Not everybody knew about the hole. But I raised a number of other objections, as did Caroline. Sam ultimately said to the larger group: We're going ahead with this, Ramnik and I are. You guys shouldn't feel responsible for it. That's not why I shared it. Unless you have any serious new objections, we're going ahead. And then he repeated separately, inside hashtag organization——the group with me, Sam, Gary, and Caroline, the folks that definitely knew about the hole, as far as I knew——that it wasn't our responsibility, don't worry about it.
MR. ROOS: Pursuant to stipulation S2003, the government offers Exhibit 14B, which, according to the stipulation, is a spreadsheet titled Venture Deals, dated September 26, 2022.
JUDGE KAPLAN: Received.
(Government's Exhibit 14B received in evidence)
JUDGE KAPLAN: Yes.
BY MR. ROOS:
NISHAD SINGH: Yes.
MR. ROOS: I just want to ask you about a few of the venture deals.
First, do you see in lines 2, 7, and 9 something called Modulo Capital?
NISHAD SINGH: Yes.
NISHAD SINGH: It's a trading firm run by some old associates of Sam.
NISHAD SINGH: I don't know where it was initially, but it moved to the Bahamas.
NISHAD SINGH: Lily Zhang.
MR. ROOS: And do you see——let's focus on line 7. What was the investment amount for that Modulo Capital transaction?
NISHAD SINGH: For the specific one or the sum of them?
NISHAD SINGH: $250 million.
NISHAD SINGH: It says——can you click on the cell. Sam Bankman-Fried.
MR. ROOS: And look over at the closing date. It says September 26, 2022. Was this before or after your conversation about the $13 billion hole?
NISHAD SINGH: After.
NISHAD SINGH: Yes.
NISHAD SINGH: Scaramucci's VC firm.
NISHAD SINGH: Yes.
NISHAD SINGH: Yes.
NISHAD SINGH: Yes.
MR. ROOS: This morning in your testimony you mentioned that there were loans made to you for corporate purposes. What were those loans for?
NISHAD SINGH: There were various ones for various purposes. Two high-level categories include amounts that ran through me for campaign donations and amounts that didn't literally go through me but on paper I was on the hook for, for money ultimately sent to FTX.US for its investments.
(Continued on next page)
MR. ROOS: So let's split those apart. For that second category, starting there, for the investments, how were those transactions structured?
NISHAD SINGH: I don't know for all of them. For at least one of them, the way it was structured, was that Alameda, on paper, would loan me, Sam, and Gary a large amount of money, and that, on paper, we would go and immediately give it to FTX US. I am not sure if that was a loan or if that was an investment. FTX US would then have money to go make purchases or acquisitions that it needed.
NISHAD SINGH: I don't recall the actual money ever hitting any accounts of mine or going through them, and I don't know how the funds actually moved. This was an on-paper, like description for like -- I am not sure if it actually described, well, the physical reality of what happened.
NISHAD SINGH: There were political donations made in my name, using my bank account, so these did literally go through my bank account, the funds deposited straight from Alameda.
NISHAD SINGH: Some were funded with my money or money taken as a borrow from my FTX account or money from my salary. Some of it was funded from transfers directly from Alameda accounts.
NISHAD SINGH: The majority by count or size?
NISHAD SINGH: Very, very minimal.
NISHAD SINGH: I tried to be as uninvolved as possible. I sort of had my head elsewhere.
NISHAD SINGH: There was a Signal chart called donations processing in which Sam or Gabe, his brother, or Michael Sadowsky, who worked with Gabe, or their associates would request that a donation be made in my name. Ryan Salame, who had access to my bank account, would transfer money out of my bank account for that purpose, and in some of the cases, I think when the size of the transfer was large enough, there would be an email that would go to me. I would get prompted, often repeatedly because I was usually delinquent, to click on the approve button, and then it would go out.
NISHAD SINGH: It changed over time. Initially, I was invested in and cared about and was just kind of -- initially, there were meaningfully my donations, but for the majority of them, and after some point in time, my role was to click a button.
NISHAD SINGH: They did.
NISHAD SINGH: They did.
NISHAD SINGH: He was the CEO of FTX digital markets, and he also ran the fiat management team at FTX and OTC trading at Alameda.
MR. ROOS: I show you now what's been marked for identification as Government Exhibit 1808.
Do you recognize this?
NISHAD SINGH: That's Ryan Salame.
JUDGE KAPLAN: Received.
(Government Exhibit 1808 received in evidence)
JUDGE KAPLAN: Yes.
NISHAD SINGH: This is Ryan Salame.
NISHAD SINGH: I don't know the full extent of it. What I observed is that Ryan Salame had access to my bank account, to Sam's bank account, and that he would like log in to my account at Prime Trust, that's where I had a bank account, would send and specify the details for a wire to be spent to a political candidate or a super PAC and then would ping me in the chat to ask me to click OK in my email to have it get sent out.
NISHAD SINGH: The donations processing chat.
NISHAD SINGH: Used Signal.
MR. ROOS: The government offers Exhibit 475, pursuant to stipulation S2003. Per the stipulation, this document is a message exchange between or thread among Nishad Singh, Samuel Bankman-Fried, Ryan Salame and others.
JUDGE KAPLAN: Received.
(Government Exhibit 475 received in evidence)
JUDGE KAPLAN: You may.
MR. COHEN: Your Honor before we proceed, may we request a limiting instruction regarding the others on the chat besides the individuals identified by Mr. Roos?
JUDGE KAPLAN: Who are you talking about?
JUDGE KAPLAN: Why don't we take our break, 15 minutes.
(Jury not present)
(Recess)
JUDGE KAPLAN: Before we bring in the jury, counsel, with respect to any proposed additions to the jury charge, I would like a red line whenever you submit them.
MR. ROOS: No problem.
On the exhibit, I think basically nobody is objecting to the admission, if I understand it correctly. It is to how the jury is to consider various messages. Basically, the witness, Ryan Salame, the defendant are all on it, and then there are some other folks, Gabe Bankman-Fried, Michael Sadowsky, Keenan Lantz, and some other individuals.
The government's view is that the messages by those individuals are agent statements or are commands, directives, questions that are nonhearsay, and I think the defense position may be that they should be offered not for their truth.
JUDGE KAPLAN: Take your best three that you think are a problem if offered for the truth and explain it to me.
MR. COHEN: Sure.
Mr. Keenan Lantz and Mr. Michael Sadowsky did not work for Alameda, did not work for FTX. They were political consultants to another company called Gap that was run by the defendant's brother and others. It's really -- I don't think there is any allegation, at least not that I have heard, that any of them are part of the conspiracy, and in terms of the agency argument, the government is essentially arguing they are agents of agents of agents, and we think it goes too far.
JUDGE KAPLAN: What I was hoping to get is for you to point me to the best three and tell me why it matters apart from having a quiz on the law of evidence.
MR. COHEN: I'm sorry, your Honor.
I don't know what page counsel intends to go through is part of the problem.
JUDGE KAPLAN: What are you reading from?
MR. ROOS: This is the second page of Government Exhibit 475. This one, for instance, is by Keenan Lantz. And setting aside even the agency determination under --
JUDGE KAPLAN: There is no part of it that's offered for the truth.
JUDGE KAPLAN: Right.
Is there anything here that's offered for the truth by somebody who you claim is not an agent or a conspirator, Mr. Cohen, that matters at all in this case?
MR. COHEN: All I was asking for was an instruction as to the people that it is not being offered for the truth for.
JUDGE KAPLAN: I understand that. But does any of it matter?
MR. COHEN: To the extent this is in evidence and the jury can read it, it could matter.
JUDGE KAPLAN: You are not getting my point. I'm sorry.
JUDGE KAPLAN: If somebody wrote a message here that said, what time is it, and he wasn't an agent, who cares if it's offered for the truth or not offered for the truth, and why should there be a limiting instruction. Why should all of us be taking time on that issue? If there is something here that potentially hurts, I'm with you all the way.
MR. COHEN: I understand, your Honor. I'm a little limited because up until just now I didn't know what part of this they were going to offer.
Hold on one second.
MR. ROOS: I'm offering the whole thing, but if this is helpful to move us along, we can just put this in. If Mr. Cohen wants to flag something for me overnight about something that's for the truth that he finds problematic, we could then work it out and raise it.
MR. COHEN: That would be fine.
JUDGE KAPLAN: That sounds fine.
Bring in the jury and let's get the witness.
Thank you for resolving that way, both of you.
(Jury present)
JUDGE KAPLAN: The defendant and the jurors all are present, as they have been throughout.
Mr. Roos, you may continue.
JUDGE KAPLAN: You may. It is received.
NISHAD SINGH: On Signal.
NISHAD SINGH: Yes.
NISHAD SINGH: Not on the device that took a screenshot.
NISHAD SINGH: My laptop.
NISHAD SINGH: Four weeks since the time of the screenshot, which was sometime in November.
NISHAD SINGH: Because the disappearing message timer was set to four weeks.
NISHAD SINGH: It specifies a retention period for messages such that messages that are older than that period get deleted.
MR. ROOS: Starting with the first message in the chat, someone named Keenan Lantz sends a message. Who is Keenan Lantz?
NISHAD SINGH: Keenan Lantz worked for Gabe Bankman-Fried and Michael Sadowsky.
NISHAD SINGH: He was Gabe's partner, partner at work at Guarding Against Pandemics.
NISHAD SINGH: It was a PAC that Gabe and Michael ran.
NISHAD SINGH: Did the PAC?
NISHAD SINGH: Sam funded it.
MR. ROOS: Focusing on this first page, it says: @Salams, can we get the 20K from Nishad Singh to the Delaware democratic party today.
Who is @Salams?
NISHAD SINGH: That's Ryan Salame. This is my nickname in my phone for him.
MR. ROOS: What is the reason Lantz asked him to send $20,000 from you to the democratic party of Delaware?
NISHAD SINGH: Keenan knew, I believe it had been well established by this point, October 17, that Ryan was the person who was actually logging in to my bank account and sending wires.
NISHAD SINGH: Not at all.
MR. ROOS: Two messages down, Salame or Salams says: This is queued up. And adds: Also resent the last five verification emails.
What did you understand that to be a reference to?
NISHAD SINGH: These are referencing the same type of thing. Here Ryan is saying that he has queued up a donation, as in he has like put it into my bank account, but I had to click approve on an email that was sent to me, and I missed the window for clicking approve on a bunch of others, which is typical. I wasn't paying a lot of attention to this. So he resent them and he requests here that I click OK on them as well.
MR. ROOS: When Salame was setting up donations like this for you, where did you understand the money was coming from?
NISHAD SINGH: A combination of my money and money that he had deposited -- I don't know that he did it. Somebody had deposited directly into my bank account.
NISHAD SINGH: Through a wire like from my bank account.
MR. ROOS: You used the term earlier, when describing Guarding Against Pandemics, a PAC. Do you know what that stands for or what it refers to?
NISHAD SINGH: Political action committee.
MR. ROOS: Just to be clear, how would the money go from Alameda, in the cases it came from Alameda, to the campaign?
NISHAD SINGH: Funds would start out with Alameda at some bank account. They would get transferred into -- wired to my Prime Trust account, which is another bank account, and then Ryan would request a wire withdrawal from my bank account to the campaign as a destination, and I would click OK in my email.
MR. ROOS: Mr. Singh, do you see partway down the page where Keenan Lantz asks @SamBF: Will you be cool with me being able to set up wires via PT?
For starters, who is Sam BF?
NISHAD SINGH: That's Sam Bankman-Fried. This is what I had him as in my phone.
NISHAD SINGH: I believe he is asking if there can be a Prime Trust PT account for Sam that Keenan would set up and have access to.
NISHAD SINGH: Yes.
MR. ROOS: The Salames message says: SBFs are all queued and sent.
What is queued and sent a reference to?
NISHAD SINGH: I understand it to mean that Ryan already had access to some bank accounts under Sam's name, and he had done what he did for me, which was to send the wires. He might also be saying here that he clicked --
MR. COHEN: Objection.
JUDGE KAPLAN: Strike everything after he might, including he might.
MR. ROOS: What was your understanding with respect to whether the defendant had a similar setup as to use for paying donations?
NISHAD SINGH: That was my belief inferring from the messages and thread like this one.
MR. COHEN: Same objection.
MR. ROOS: In addition to having your bank account used to make wire transfer donations, how, if at all, were checks used for making donations?
NISHAD SINGH: I signed a bunch of blank checks attached to my Wells Fargo account, which at first only contained my salary, but eventually also contained money that I had wired to it from my Prime Trust account. Those were used by Gabe and his team to make donations in my name to candidates.
NISHAD SINGH: I signed blank checks.
NISHAD SINGH: I handed them back to Gabe's assistant, who provided them to me.
NISHAD SINGH: Yeah. Gabe had called me asking that --
MR. COHEN: Objection.
JUDGE KAPLAN: Ground.
MR. COHEN: Hearsay.
JUDGE KAPLAN: Received for the effect on the listener, the witness.
Members of the jury, not for the truth.
NISHAD SINGH: Continue?
JUDGE KAPLAN: Yes, please. A. Gabe had called me asking if I was OK with making a lot of small donations to democratic candidates. We talked some about the purpose of it. I said OK.
NISHAD SINGH: I tried to -- I gave my credit card to Gabe, or maybe to Keenan Lantz, so that he could try to make payments through ActBlue using my credit card, drawing on my salary. It was -- my credit card got rejected at some point. He tried to make a PayPal for the same reason. This also had some issues. Eventually it seemed that checks were the most viable option left. So Gabe called me saying that he was flying out one of his assistants with a bunch of checks from my bank account. I had given them access to my bank account for me to sign.
JUDGE KAPLAN: What is ActBlue?
NISHAD SINGH: ActBlue is a platform used to make donations to democrats.
JUDGE KAPLAN: And you said he was flying out one of his assistants. What did that mean?
NISHAD SINGH: One of his assistants had a lot of checks from my bank account, but they weren't signed yet. So she was going to arrive in the Bahamas and meet me at the office where I would sign them and hand them back to her.
JUDGE KAPLAN: Go ahead, Mr. Roos.
MR. ROOS: For the donations that were made in your name in the fall of 2022 that were funded with wires from Alameda, from where did you understand the money was coming from?
NISHAD SINGH: Customers.
NISHAD SINGH: There was an enormous hole, I knew, deficit in funds at FTX for customers, and Alameda sort of also had that hole. It was theirs to fill. Alameda sending me money to spend, as opposed to keeping money for customers, say, necessarily deepens that hole and is drawing on funds that would have otherwise gone to customers.
JUDGE KAPLAN: From where did you get that understanding?
NISHAD SINGH: From my conversation in September with Sam in which he told me $5 billion was deliverable, and I earlier that day heard that there was a $13 billion amount borrowed by Alameda from FTX.
JUDGE KAPLAN: Thank you.
MR. ROOS: Now, you testified that many of these donations you were not involved in. What is your understanding about why the donations were made in your name?
NISHAD SINGH: For advantageous optics, that it was useful for my name to be associated with some donations, even if the end recipient understood that they were really coming from someone else.
JUDGE KAPLAN: Received.
(Government Exhibit 477 received in evidence)
JUDGE KAPLAN: You may.
NISHAD SINGH: This is also a Signal chat with screenshots from my phone, as opposed to a computer.
NISHAD SINGH: Michael Sadowsky.
NISHAD SINGH: Yes.
NISHAD SINGH: Yes.
NISHAD SINGH: There was a donation to be made to the LGBTQ victory fund.
MR. ROOS: About halfway down there is a message. The next one too. It says: In general, you, being the center left face of our spending, will mean you giving to a lot of woke, swear word, for transactional purposes.
Had you had conversations about that in the past?
NISHAD SINGH: Yes, yes, though less crudely.
NISHAD SINGH: That donations that were really effectuated by a group of people, not just me, would be made in my name, so I would be the face of those donations, and that there would be targeted at center left recipients. The four transactional purposes part, I believe, refers to the fact that --
MR. COHEN: Objection.
MR. ROOS: It goes to his understanding, and it's based on what he said in his past conversations.
JUDGE KAPLAN: Let's find that out.
MR. ROOS: The belief you are about to testify about transactional purposes, to what extent, if at all, was that based on past conversations?
NISHAD SINGH: Past conversations and this one. This thread describes the transaction.
JUDGE KAPLAN: Past conversations with whom?
NISHAD SINGH: With Michael and Gabe and Sam.
JUDGE KAPLAN: Sustained.
And Sam. Overruled.
NISHAD SINGH: That on its face a donation may appear to be for one purpose, say going to a PAC called the LGBTQ Victory Fund. But, in reality, the true purpose is something else, and it may be the funds end up affecting some outcome that seems unrelated to LGBTQ efforts.
MR. ROOS: On the next page you write: I think I need to do some of this and prob see if there are other viable people at FTX for it.
What did you mean by, see if there are other viable people at FTX for it?
NISHAD SINGH: I wasn't comfortable being in this position for very long, and so I put it on myself here to search for replacements for me, other people at FTX willing to have their name be used for donations.
MR. ROOS: What, if anything, was done to track donations made by FTX employees, FTX and Alameda employees?
NISHAD SINGH: I partook in some tracking myself. That's really all I know about there.
NISHAD SINGH: There was a point in 2022 when Sam had asked a group of us -- I believe me, Caroline, Ryan, Gary, Adam, and others -- if we could contribute to a spreadsheet, a Google sheet that he made, listing the donations that we had been a part of so that he could understand and represent to others what all FTX and Alameda employees were donating to and where our influence was.
MR. ROOS: Government offers Exhibit 28, which, according to stipulation S2003, is a spreadsheet called Alameda FTX donations.
JUDGE KAPLAN: Received.
(Government Exhibit 28 received in evidence)
NISHAD SINGH: I have. In Google Sheet form.
NISHAD SINGH: That the actual document that I touched and that Sam circulated was a Google Sheet. This appears to be a Microsoft Excel version of it.
NISHAD SINGH: It's about the donations made by various people -- those are listed on the bottom in tabs -- to various recipients.
NISHAD SINGH: From left to right: SBF, so that's Sam; FTX US, the company; Nishad, that's me; Caroline, that's Caroline Ellison; RDS, Ryan Salame.
NISHAD SINGH: The first is attempt at categorizing the motivations or type of donation. The second is a recipient column that just names a recipient. Date is the date of the transfer. USD amount is the dollar equivalent of the amount transferred. In some cases there is crypto here, but in most cases there are dollars sent. Notes is some additional context I added. U.S. tax deductible is my almost-wrong-in-all-cases guess if the donation was tax deductible.
NISHAD SINGH: Sam did.
MR. ROOS: I want to change topics.
You mentioned this morning that you are testifying here pursuant to a cooperation agreement, is that right?
NISHAD SINGH: That's right.
NISHAD SINGH: Yes.
NISHAD SINGH: Many times.
NISHAD SINGH: Somewhere around November 20, 2022.
MR. ROOS: When you first met with the FBI or with prosecutors, had you been arrested or charged with crimes?
NISHAD SINGH: I am not sure the exact number. Maybe around 20 times.
NISHAD SINGH: I did.
NISHAD SINGH: I discussed how I defrauded customers, investors, how I was a straw donor for campaign donations, and how I knew that the money going to those donations was from customer funds.
NISHAD SINGH: I did.
NISHAD SINGH: Talked about other individuals.
NISHAD SINGH: Defrauding customers, defrauding investors, campaign finance violations, and money laundering.
MR. COHEN: Your Honor, may I have a brief sidebar?
JUDGE KAPLAN: Yes.
(At sidebar)
MR. COHEN: Your Honor, I didn't want to interrupt Mr. Roos in front of the jury, but I wanted to ask the Court at the appropriate time to give a 404(b) instruction on the political campaign testimony we will hear today.
JUDGE KAPLAN: Haven't I done that already?
MR. COHEN: I thought you gave it on a different topic, on the FCPA topic. I think you did that last week.
JUDGE KAPLAN: Is there any objection?
MR. ROOS: I don't think there has been a 404(b) instruction on the campaign finance.
I guess the question I have is, what do you have in mind at this point? I am not sure that he has testified --
MR. COHEN: He just did.
MR. COHEN: He just said one of the crimes he committed was being a straw donor.
MR. ROOS: That he committed. I am not sure he has actually said. I'm happy to look at the testimony.
MS. SASSOON: I think it is also direct evidence.
JUDGE KAPLAN: Doesn't it really come down to saying that the defendant, as opposed to this witness, is not charged here, as I have told you before, with any crimes involving any violations of campaign finance costs.
MR. COHEN: That would be fine, your Honor.
MS. SASSOON: I just want to make sure that FCPA instruction referred to -- it's for the limited purpose of propensity. I don't think that applies here.
(Continued on next page)
(At sidebar)
JUDGE KAPLAN: Members of the jury, I just want to remind you that, as I said earlier in the trial, the defendant is not charged with any criminal violation of campaign finance laws in this case. This evidence is coming in for other purposes, not least of what would be the fact that this witness has pleaded guilty to such a violation.
NISHAD SINGH: Six.
NISHAD SINGH: Yes. And more.
MR. ROOS: When you were committing the frauds you testified about, did you know what you were doing was wrong and illegal?
NISHAD SINGH: Yes.
MR. ROOS: And with respect to the conspiracies you pled guilty to commit wire fraud, securities fraud, commodities fraud and money laundering, who did you conspire with?
NISHAD SINGH: I conspired with Ryan Salame, Sam Bankman-Fried, Gary Wang, Caroline Ellison.
NISHAD SINGH: That is.
NISHAD SINGH: I do.
NISHAD SINGH: It's my cooperation agreement.
NISHAD SINGH: Yes.
MR. COHEN: No objection.
JUDGE KAPLAN: Received.
(Government Exhibit 3501-002 received in evidence)
JUDGE KAPLAN: You may.
MR. ROOS: Mr. Singh, we are not going to go through the whole document, but just for starters, looking at pages 1 and then 2, does that state the crimes that you have pled guilty to?
NISHAD SINGH: Yes.
MR. ROOS: You see the first full paragraph on that page. What do you understand this paragraph in the cooperation agreement to require of you?
NISHAD SINGH: This paragraph describes my obligations as a part of the cooperation agreement. At a high level, it requires that I provide truthful information to the government, that I testify truthfully if asked, and that I commit no further crimes.
MR. ROOS: If you satisfy those obligations, what is your understanding as to what the government will do?
NISHAD SINGH: The government believes that my assistance was substantial, they can write a 5K letter to the judge to be considered at my sentencing.
NISHAD SINGH: It's a letter that describes the extent of my cooperation and what crimes I committed.
MR. ROOS: If you were to violate your agreement by not telling the truth or by committing more crimes, what do you understand would happen to your cooperation agreement?
NISHAD SINGH: It may not be sent.
NISHAD SINGH: The 5K letter. It wouldn't be created and sent to the judge.
NISHAD SINGH: The agreement itself would not be voided.
NISHAD SINGH: Not yet.
NISHAD SINGH: Seventy-five years.
NISHAD SINGH: None.
NISHAD SINGH: I don't know.
NISHAD SINGH: I'm hoping for no jail time.
NISHAD SINGH: The judge does.
MR. ROOS: Now, does you getting a 5K letter from the government depend in any way on the outcome of this trial?
MR. ROOS: You said one of the crimes you pled guilty to was conspiracy to commit securities fraud?
NISHAD SINGH: Yes.
MR. ROOS: On FTX investors.
I want to ask you some additional questions about that.
When you were working at FTX, did you ever work on a project relating to making FTX's revenues higher?
NISHAD SINGH: Yes.
NISHAD SINGH: December 30 or 31 of 2021.
NISHAD SINGH: I made transfers from one of Sam's companies to another, to FTX, to make it appear as though FTX had higher revenues.
MR. ROOS: So a few follow-up questions on this.
First, just to be clear, where were FTX's revenues at this point in time?
NISHAD SINGH: What were they for the previous year?
NISHAD SINGH: Around 950 or $960 million for that year.
NISHAD SINGH: Sam messaged me and Gary and possibly others, but certainly the two of us, in Signal asking what we could do to get revenue over the line of a billion dollars.
NISHAD SINGH: Sam and Gary talked about a number of options. In the end, Sam landed on charging for the service of Serum staking.
NISHAD SINGH: It's a token that Sam and Gary made.
NISHAD SINGH: Customers could so-call stake their Serum on FTX, which entailed locking up those tokens such that they couldn't be sold, in return for some interest.
NISHAD SINGH: Right.
NISHAD SINGH: FTX facilitated distributing the staking rewards, facilitating the distribution of interest from the ECO Serum account.
MR. ROOS: Can you explain what the defendant proposed with respect to charging for that service.
NISHAD SINGH: The defendant -- Sam proposed charging ECO Serum to the account that paid the interest, 25 percent of the USD equivalent of the interest distributed to FTX.
NISHAD SINGH: It would -- I know that, after calculating, it was determined that it would bring it over the line of 1 billion. I think that it added $50 million or so in revenue.
NISHAD SINGH: It was either December 30 or 31 of 2021.
MR. COHEN: Objection. Leading.
JUDGE KAPLAN: Sustained.
MR. ROOS: What, if any, was the plan with respect to when to charge those payments to ECO Serum?
NISHAD SINGH: I was told to make it appear as though they had been getting charged throughout the year, so to backdate the transactions associated with paying this fee.
NISHAD SINGH: Sam.
NISHAD SINGH: The FTX database that he looked at has time stamps in it for when transactions happen, but in some cases those time stamps are mutable and can be adjusted and changed. So I was being asked here to make transfers and then to go into the database and reassign the dates for them.
(Continued on next page)
BY MR. ROOS:
NISHAD SINGH: The effect of making the transfers would have been to increase FTX's stated revenue, but not real revenue, by some $50 million, and the effect of the backdating would be to make it appear as though that had been getting paid out throughout the year, as opposed to all at the end.
MR. ROOS: Let's take a look at Government Exhibit 51.
The government offers pursuant to S2003, stipulation.
JUDGE KAPLAN: Received.
(Government's Exhibit 51 received in evidence)
JUDGE KAPLAN: Yes.
BY MR. ROOS:
NISHAD SINGH: I recognize this as the FTX stats file, one that Sam made and posted inside a, among other places, a Slack channel that I was in that contained a lot of people, 20 or 30 people, with interest in raising, and I understand that copies of this spreadsheet or versions of it made their way into——
MR. COHEN: Objection.
JUDGE KAPLAN: Sustained as to the understanding.
MR. ROOS: What, if anything, did you talk to the defendant or other FTX employees about what was done with this spreadsheet?
NISHAD SINGH: Ramnik told me that versions of this spreadsheet made their way into data rooms that were shared with FTX investors.
MR. ROOS: Now looking at this first tab, the overview page, where does it say FTX's revenue for year 2021?
NISHAD SINGH: Cell E8.
NISHAD SINGH: Just over a billion dollars.
NISHAD SINGH: I believe that this is a download of data that was collated and——
MR. COHEN: Objection.
JUDGE KAPLAN: Yes. Sustained. Strike the answer.
Mr. Roos, foundations are sometimes necessary.
MR. ROOS: Yes, your Honor.
So let's go over to the tab that says Staking Fees, and can we scroll down. Scroll down to like the year 2021. So you'll have to go down a bunch, maybe using the side tab.
BY MR. ROOS:
NISHAD SINGH: I do.
NISHAD SINGH: This is a reflection of the erroneous transfers that I made and backdated of one of them.
NISHAD SINGH: The transfers that I'd made on December 30th or 31st of 2021, supposedly for eco Serum paying FTX 25 percent of the USD value of the distributed interest. I made those once per month, backdated them so they looked like they happened once per month, and this is the USD value of one of those transfers.
NISHAD SINGH: I made them using a Python script. They ended up in the FTX database.
MR. ROOS: Now you mentioned this is one of those monthly payments. Are there other such monthly revenue, or staking fee payments?
NISHAD SINGH: Yes, one per month.
NISHAD SINGH: Yes.
NISHAD SINGH: Yes.
MR. ROOS: What was the result of including these staking fees, these backdated staking fees, in the revenue total for 2021?
NISHAD SINGH: It was the difference between FTX being under and over a billion dollars of revenue in 2021.
NISHAD SINGH: He told me to do it.
MR. ROOS: What, if anything, did you learn about this, about the revenue number being shared with investors?
NISHAD SINGH: I didn't learn anything affirmatively, but I knew it was shared.
MR. COHEN: Objection. A. I assumed it was shared.
JUDGE KAPLAN: Overruled.
I'm sorry. I'm going to sustain that.
JUDGE KAPLAN: The jury will disregard it.
NISHAD SINGH: It was. These numbers were given to auditors.
NISHAD SINGH: Yes.
NISHAD SINGH: Looking at financials for the previous years at FTX.
MR. ROOS: And so I think you answered that information was given to auditors. What, if anything, did auditors ask to see?
MR. COHEN: Foundation, objection.
JUDGE KAPLAN: Sustained.
MR. ROOS: So just to take a step back, you testified that information was provided to auditors; is that right?
NISHAD SINGH: Correct.
NISHAD SINGH: I did.
NISHAD SINGH: I was asked to describe what they were.
MR. ROOS: And to what extent, if at all, were you asked about materials relating to the staking fees?
NISHAD SINGH: Jayesh, afterwards, at some point after my conversation describing the, like, technical basis for this number, asked me if there——if the auditors were interested in seeing an agreement about it. I told him I don't have the agreement and I redirected him to Sam.
JUDGE KAPLAN: Received.
(Government's Exhibit 323 received in evidence)
JUDGE KAPLAN: Yes.
BY MR. ROOS:
MR. ROOS: Mr. Singh, at the top of this agreement it says Rewards Agent Agreement. Do you see that?
NISHAD SINGH: I do.
NISHAD SINGH: Yes.
NISHAD SINGH: Incentive Ecosystem Foundation and FTX Trading Ltd.
NISHAD SINGH: Sort of.
NISHAD SINGH: Yes.
NISHAD SINGH: Sam Bankman-Fried.
MR. ROOS: Okay. Now let's go back to the first page.
Do you see here where it says the fee amount that would be paid?
NISHAD SINGH: Yes.
NISHAD SINGH: 25 percent of the distributed rewards.
NISHAD SINGH: 25 percent.
NISHAD SINGH: Yes.
NISHAD SINGH: January 1, 2021.
NISHAD SINGH: December 30th or 31st, 2021.
MR. ROOS: In addition to this——my questions to you about revenue, what, if anything, was done at FTX to remove losses from the company's expenses?
NISHAD SINGH: In one instance, there were a bunch of accounts that found an exploit in Gary's original version of the spot margin system. They had essentially borrowed a lot of dollars against some MobileCoin, but if sold, the MobileCoin wasn't going to actually cover the full amount.
MR. COHEN: Objection, foundation.
JUDGE KAPLAN: Try again, Mr. Roos. The jury will disregard it.
MR. ROOS: So just to take it in pieces, I asked you what, if anything, was done at FTX to remove losses from the total expenses. Were there——so let me actually ask you instead: In 2021, were you aware of any losses——just yes or no——associated with problems in the margins of some?
NISHAD SINGH: Yes.
NISHAD SINGH: Ryan Salame and Sam Bankman-Fried sounded the alarms about somebody exploiting the margin system.
NISHAD SINGH: I learned that there were a number of accounts that had deposited a lot of MOB——or M-O-B, MobileCoin——as collateral, and had withdrawn a lot of USD against it using the spot margin system. They had done so in a way such that the——in a way that the FTX margin system essentially overvalued how much it could get out of the MobileCoin, meaning that these accounts weren't yet liquidated but really should have been much earlier.
NISHAD SINGH: I heard from Sam Bankman-Fried——he told me, after it was addressed, that the losses would constitute a fraction of Alameda's revenue that year, around $1 billion.
NISHAD SINGH: He directed the reassigning of the accounts themselves that had on these positions that should have been but were not liquidated to Alameda, meaning that Alameda absorbed the losses associated with those accounts.
NISHAD SINGH: It meant that because Alameda data is not publicly shared, that these losses would not be publicly shared.
MR. ROOS: Okay. I want to change topics.
Directing your attention to November of 2022. Can you, at a high level, describe what happened to FTX.
NISHAD SINGH: Collapsed. Customers tried to withdraw their money and FTX didn't have it.
MR. ROOS: So let's break it down.
Did there come a time in November 2022 when you learned about an increase in customer withdrawals?
NISHAD SINGH: Yes, November 5th.
NISHAD SINGH: Clients had moved a lot of FTT that they owned on chain to their exchange. This signaled to the crypto industry that a lot of FTT was about to be sold. This followed a leak of an Alameda balance sheet that had been published a few days earlier. I was very concerned that this might spell doom and the end of our attempts to make customers whole, and the end of the ongoing fraud, and that the mechanism for the doom would have been customers withdrawing.
MR. ROOS: And so can you explain why you were concerned that withdrawals would be a problem for FTX.
NISHAD SINGH: Because customers believed, were told that they had balances that were not backed, and so if they withdrew more than the limited funds that existed, it would become evident that there was an enormous hole and that their funds had been used.
MR. ROOS: Just to clarify your answer, you said customers were told that they had funds that were not backed. Did you mean customers were told that they had funds and they were not backed or customers were told they had funds but were not backed?
MR. COHEN: Objection.
JUDGE KAPLAN: Overruled.
NISHAD SINGH: The former.
MR. ROOS: Now earlier in your testimony you told us about some loans that had been made to you for corporate purposes. Do you remember that?
NISHAD SINGH: Yes.
MR. ROOS: When withdrawals started picking up at FTX in November 2022, what, if any, conversations did you have with the defendant about those loans?
NISHAD SINGH: A few days or maybe a day after my worries, I was terrified that due to the collapse, I wouldn't be able to repay all my loans that I once thought I could, and I asked that we find an erroneous way to sort of remove them.
MR. COHEN: No objection.
JUDGE KAPLAN: Received.
(Government's Exhibit 480A received in evidence)
JUDGE KAPLAN: You may.
NISHAD SINGH: This is a screenshot from my computer of a Signal chat with Sam.
NISHAD SINGH: Mine.
MR. ROOS: Okay. And focusing on your message, you say there, "one thing that'd seriously help me is if I didn't have debts." What debts were you referring to?
NISHAD SINGH: There were hundreds of millions of dollars of loans that I had taken for the——for Alameda's and FTX's purposes, or loans that I'd taken for personal purposes but that Sam had requested I take in the form of a loan as opposed to selling my FTT.
NISHAD SINGH: I received a $477 million on-paper loan in December or November of 2021, nominally for me to exercise shares that were granted to me.
NISHAD SINGH: Sam did.
MR. ROOS: The same sentence says, "for me exercising, more for US investments." What were you referring to there?
NISHAD SINGH: There were on the order of $100 million or maybe more of other loans that ran through me for expenditures from FTX.US, things like acquiring LedgerX, acquiring Embed.
NISHAD SINGH: Using the setup I described earlier in which the lawyers would paper up a transaction, a loan from Alameda through me, Sam, and Gary, and maybe others, but certainly the three of us, and that those funds would ultimately make their way into FTX.US's wallets and that FTX.US could spend that money to——to make acquisitions.
MR. ROOS: The third line here, it says, "maybe 80 million extra or so are donations/personal/etc. that went through my bank acc and are in my name." What were you referring to?
NISHAD SINGH: Here I'm referring to instances in which I'd withdrawn from my FTX account using the spot margin system or instances in which Sam had given me like a loan. These are instances in which I'd first asked to sell FTT but Sam preferred I take a loan. And so these are ones that are in my name. These also include the transfers directly from Alameda into my bank accounts that, you know, weren't discussed beforehand.
NISHAD SINGH: Bank account.
MR. ROOS: Now you see lower it says, "would you be ok letting me trade to get rid of the approximately 80?" What were you referring to?
NISHAD SINGH: I was asking if I could make some fictitious transactions such that it looked like I had paid off this amount that I owed.
MR. ROOS: And the defendant asks, "what does trade mean?" And you say, "sell FTT or SRM earlier in 2022." What does that mean?
NISHAD SINGH: I was asking if I could make a trade, selling the tokens that I had asked to previously sell, but backdating them to points that would cover the size of the loans.
NISHAD SINGH: SRM is Serum.
NISHAD SINGH: I was really afraid of what it would look like, that I would look really corrupt, that I would, you know——the interpretation to them would——would be——would be really negative.
NISHAD SINGH: It's something I knew could be done because Sam had proposed, you know, once to me in other contexts.
MR. ROOS: And the defendant says, "I think that's probably fine." After that, did you go through with this transaction?
NISHAD SINGH: It felt wrong. I was not——not to make an excuse for my having proposed this, not at all, but I was in different levels of having a right mind throughout these days, and in better moments, I didn't pursue it.
MR. ROOS: Now directing your attention to November 6, did there ever come a time where you discussed Alameda's balances with the defendant?
NISHAD SINGH: Yes.
NISHAD SINGH: Forgive me. You're asking about November?
NISHAD SINGH: Yes. On November 6th, we talked about how there was a hole.
NISHAD SINGH: Sorry. This is specifically about Alameda balances?
NISHAD SINGH: I recall Sam drafting——Sam and Caroline drafting balance sheets that showed all of FTX and Alameda's assets versus liabilities.
MR. ROOS: As part of these discussions, what, if any, conversations did you have about the old FTX fiat account you testified about earlier in your testimony today?
NISHAD SINGH: One of the exercises that related to determining Alameda's balances that Sam asked me for help in was giving him a list of the USD values in various accounts, much like the June exercise that we had done. He provided me a list of accounts and referenced the seoyun one, the one that now held the FTX fiat old obligation.
MR. ROOS: Government offers Exhibit 480B, which is a message exchange between the witness and the defendant, pursuant to stipulation S2003. It's dated November 6, 2022.
JUDGE KAPLAN: This is 480D or——
JUDGE KAPLAN: Thank you. Received.
(Government's Exhibit 480B received in evidence)
JUDGE KAPLAN: Yes.
BY MR. ROOS:
NISHAD SINGH: This is also a Signal message, this time sent from Sam.
NISHAD SINGH: Sunday, November 6th.
MR. ROOS: And focusing on the message, how, if at all, does this relate to what you were just describing about the seoyun account?
NISHAD SINGH: The bottom account, in the first message, Sam's enumerating a bunch of accounts for me to grab the USD value of. In the second message, Sam says to include the seoyun one, which has the old fiat account.
NISHAD SINGH: Because we had had the discussion months earlier about me moving it to——moving the FTX fiat old subaccount into a different account so that Alameda wasn't charged interest but could still know about it.
MR. ROOS: And several months prior, which you testified about earlier, what was the balance in that account at the time?
NISHAD SINGH: Negative 8 billion.
MR. ROOS: Now let's focus on the evening of November 6. On that evening did you have any conversations with the defendant about tweeting or Twitter?
NISHAD SINGH: There was a war room of sorts that had gathered in Sam's apartment in Gemini 1D with Sam, Caroline, Gary, me, Ryan Salame on the phone, Ramnik Arora, and eventually others. One of the items being discussed was how to address the crisis now at hand publicly. They were discussing versions of a tweet that Sam was workshopping. There was a point when they were discussing whether or not to characterize FTX as solvent or well capitalized. I felt very uncomfortable with both definitions. I felt neither was true. I leaned over the couch in which they were talking and said: I'm not comfortable with this. I'm recusing myself. They acknowledged in a kind of annoyed way and proceeded.
NISHAD SINGH: Specifically, I was leaning over the section of the couch with Sam and Ramnik, but the whole group heard.
NISHAD SINGH: Drafting a potential tweet for Sam to send.
NISHAD SINGH: I don't know that I had the most precise definition at the time. I mostly wanted to express that I didn't approve of this and——but I didn't——I acknowledged I didn't have the power to stop them. I'd already made clear my preferences on what to say and so I just didn't want to be involved.
NISHAD SINGH: It was really dishonest, and I was, you know——I'd been asking if we could just halt withdrawals instead.
NISHAD SINGH: Yes.
NISHAD SINGH: The following morning.
MR. ROOS: Let's look at the first tweet. The defendant says, "FTX is fine. Assets are fine." Was that accurate as of November 7, 2022?
NISHAD SINGH: We had determined definitively that FTX had a hole. That was clear to everybody involved in the discussion I just mentioned.
NISHAD SINGH: Yes.
MR. ROOS: That tweet includes a statement, "FTX has enough to cover all client holdings." Was that true at the time?
NISHAD SINGH: This is an even narrower statement that is even——and therefore even more false.
NISHAD SINGH: FTX did not have enough to cover client holdings. That was the sense in which it was not fine.
MR. ROOS: At or before the time the defendant tweeted this, had you discussed the state of FTX assets with him?
NISHAD SINGH: Yes.
NISHAD SINGH: By that——I discussed with him the existence of a hole, and he——he quantified it by putting together these balance sheets.
MR. ROOS: What, if anything, did you understand the purpose of the tweets were based on your involvement in the conversation you testified about?
NISHAD SINGH: I'd overheard in the conversation opinions that these tweets should be really strong, which I understood to be a euphemism for particularly misleading in such a way that will quell fears definitively.
MR. COHEN: Objection.
JUDGE KAPLAN: Mr. Roos.
JUDGE KAPLAN: Yes. Overruled. A. I understood "strong" to mean making a very confident and therefore misleading statement, or false statement, about FTX's financial condition.
NISHAD SINGH: Yes.
MR. ROOS: We can take this down.
So Judge, I'm very close to the end, but I don't think I'm going to make it by 8:30——by 4:30.
JUDGE KAPLAN: I was worried about 8:30.
MR. ROOS: Certainly we'll make it by 8:30.
Would you like me to continue——I think I've got about two minutes left——or I can stop here. I'm about to switch topics.
JUDGE KAPLAN: Well, you've got two minutes left.
BY MR. ROOS:
MR. ROOS: During the next week in November, the week in November that we've been discussing, did you have any conversations with the defendant about possible explanations for Alameda's borrowing?
NISHAD SINGH: Yes.
NISHAD SINGH: He asked me to determine the total amounts that had flown through the spot margin system historically, the largest amounts that had ever been lent and borrowed.
NISHAD SINGH: FTX supported a peer-to-peer borrowing system such that customers could explicitly lend their funds for others to borrow.
NISHAD SINGH: No. They have to opt in.
MR. ROOS: What specifically did the defendant ask you when he raised the possibility of the spot margin system?
NISHAD SINGH: He asked me to run a database query to fetch the largest——the most that had been borrowed or lent at any point in time for each coin through the spot margin system.
MR. ROOS: And was it the case that the hole that you've testified about was the result of borrowing through the spot margin system?
NISHAD SINGH: Funds were taken from bank accounts, which had nothing to do with the spot margin system, and negative amounts in the main Alameda account did not have spot margin enabled. It borrowed——and were able to because of the "Allow Negative" flag.
NISHAD SINGH: Customers had to opt in to borrowing and participating in the borrow/lending system. This would, you know——opting in was a——is tantamount to enabling spot margin. Alameda's main account, though it was really negative at times and was borrowing, wasn't doing so through this system.
MR. ROOS: Now changing dates and directing your attention to November 8, 2022, did you speak to an attorney on that day named Dan Friedberg?
NISHAD SINGH: I did.
NISHAD SINGH: I did.
MR. ROOS: Your Honor, the government offers Exhibit 480C, which is a message exchange between the defendant and the witness on November 8th, pursuant to stipulation S2003.
JUDGE KAPLAN: 480C is received.
(Government's Exhibit 480C received in evidence)
JUDGE KAPLAN: You may.
BY MR. ROOS:
NISHAD SINGH: Also between me and Sam.
NISHAD SINGH: Tuesday, November 8th.
MR. ROOS: You write to the defendant, "when you briefly called Dan he was very upset with us and blamed basically the three of us and said it was super [f'd] up, etc." Who is the Dan in this sentence?
NISHAD SINGH: Dan Friedberg.
MR. ROOS: You wrote that when he called, he blamed the three of you. What were you referring to? Who were you referring to?
NISHAD SINGH: In the call, Dan blamed me, Sam, and Gary. That's what I meant, although I don't know that my meaning was clear in the message.
NISHAD SINGH: He said that that matched his understanding, that Dan was really upset at us, and that it lined up with what Joe——Joe Bankman——had told him.
NISHAD SINGH: Dan Friedberg.
MR. ROOS: And so to close the loop on this, you say that Dan F was very upset, and his message in response to that is, "yup, makes sense"?
NISHAD SINGH: I said a few things. I said Dan is upset and that Ryan is likely to resign if we don't proceed correctly. Sam is saying, "yup, makes sense" maybe to part or all of that.
NISHAD SINGH: "For what it's worth."
MR. ROOS: "For what it's worth, I don't hate the idea of them being pissed at me—–I don't know, there are pros and cons, and probably mostly cons, but it might help them."
And so do you see that there?
NISHAD SINGH: Yes.
MR. ROOS: And you wrote——can we zoom out of this—–"this is wildly selfish of me, but they may need to know that it wasn't a ton of people orchestrating it. I think it makes them more likely to want to be here to help save the situation and the others at least."
What were you referring to here?
NISHAD SINGH: I really wanted Sam to clarify what everyone's role in this fraud was, that it's selfish, my request, because I wanted him to clarify that I wasn't orchestrating it and that I learned about it really late. I wanted Sam to clarify that he was orchestrating it.
JUDGE KAPLAN: Well, you told me you'd be done in two minutes.
JUDGE KAPLAN: This time I'm holding you to it.
BY MR. ROOS:
NISHAD SINGH: Two reasons. I was under severe emotional distress from people like Dan Friedberg calling me and blaming me for the entirety of this, and I was certainly guilty for participating in it since September, but I don't feel that I made the hole. And secondly——and I sort of wanted my——the state of my relationship with these people I loved and tried to do right by to remain intact and for them not to hate me.
Secondly, there was a crazy blame game going on and people weren't being productive. Now more than ever, to salvage whatever we could, FTX employees needed to be productive, and resolving the blame game quickly and definitively seemed like it would be a path towards that.
NISHAD SINGH: Sam making clear that he was responsible, that I was responsible in another capacity, that everyone responsible was responsible, and then moving past it so we could just maybe sell to Binance or do whatever we could to save what we could.
NISHAD SINGH: He was the——he went by a couple titles, but fundamentally he was the lead——lead lawyer. He was sort of chief legal decision-maker on everything.
MR. ROOS: And just for context, what was your mental state at this point when you were asking the defendant to do these things?
NISHAD SINGH: I'd been suicidal for some days.
JUDGE KAPLAN: Hasn't that been asked and answered?
MR. ROOS: Well, actually, let's just zoom out.
And can we go further down.
Last message, can we zoom in on it.
NISHAD SINGH: Sam said, "yup, for what it's worth, I don't think that's super selfish. I think that's probably correct."