In a recent development, Nishad Singh, a former top executive at FTX, the now-defunct cryptocurrency exchange owned by Sam Bankman-Fried, criticized his former boss for his extravagant spending habits and ostentatious lifestyle.
This criticism came as jurors at Bankman-Fried's fraud trial were shown a photograph of him posing with celebrities Katy Perry, Orlando Bloom, and Kate Hudson at the 2022 Super Bowl.
Singh, who served as the lead engineer at FTX, provided a detailed account in Manhattan federal court of the excessive spending by the bankrupt exchange and its associated hedge fund, Alameda Research. He revealed that the company spent hundreds of millions on celebrity endorsement deals and extravagant real estate purchases. "It all reeked of excess and flashiness," Singh testified.
Among the evidence presented to the jury was a photograph posted by pop star Katy Perry on her Instagram account. The image showed a smiling Bankman-Fried mingling with celebrities in luxury box seats at the NFL championship game in February, months before FTX's collapse in November.
The photograph also included executives from venture capital firm K5 Global, which Bankman-Fried reportedly paid hundreds of millions in bonuses to secure connections with high-profile individuals such as Leonardo DiCaprio, Kylie Jenner, and Hillary Clinton. K5 is managed by Michael Kives, a former Clinton aide turned Hollywood super-agent.
"We can get from them essentially infinite connections," Bankman-Fried allegedly stated in an internal memo presented to the jurors. He further claimed that K5 could likely arrange a dinner with Elon Musk, Barack Obama, Rihanna, and Mark Zuckerberg if requested.
Singh testified that he had expressed his embarrassment and disapproval of the company's spending to Bankman-Fried, stating that it did not align with his vision for the company. However, Bankman-Fried, who was accused by his ex-girlfriend and former business partner of lying and stealing in pursuit of what he believed to be the "greater good" of society, insisted that access to celebrities was vital for the company's growth.
The jury was also shown an internal spreadsheet detailing $1.13 billion spent by Bankman-Fried's company on high-profile sponsorships and celebrity endorsements, aimed at promoting its image as a secure platform for trading digital currency. The spending included $205 million for naming rights to the Miami Heat's NBA arena, $150 million for FTX logos on Major League Baseball jerseys, and millions more for endorsements from sports and entertainment figures.
Bankman-Fried also reportedly purchased a $35 million penthouse apartment in the Bahamas, despite Singh's objections that it was too ostentatious. "Sam liked the views," Singh testified.
In June, FTX filed a lawsuit against K5 Global, seeking to recover $700 million that Bankman-Fried allegedly authorized to be spent on the company, despite no apparent return on investment for FTX or its customers.
Bankman-Fried, 31, has pleaded not guilty to charges of fraud and conspiracy related to his alleged theft of over $8 billion in FTX user funds to cover losses at Alameda. If convicted, he could face a life sentence.
Singh is expected to be cross-examined by Bankman-Fried's defense attorneys on Tuesday. The trial is anticipated to continue until at least November.
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