The Commodity Futures Trading Commission has reached a conclusion on its first individual case stemming from the multi-year FTX investigation, finalizing a disgorgement order against former FTX engineering chief Nishad Singh without imposing any civil penalties.
A supplemental consent order in the Southern District of New York mandates that Singh disgorge $3.7 million, which corresponds to real estate he acquired in October 2022 using funds he knew were misappropriated from FTX customers, as detailed in the order.
In addition to the $3.7 million disgorgement, Singh faces a five-year trading ban and an eight-year registration prohibition. The CFTC chose to forgo restitution and civil penalties, citing Singh’s cooperation and his liability under an $11.02 billion criminal forfeiture order.
“Singh was complicit in major breaches of the Act and CFTC regulations during his tenure as FTX head of engineering,” stated CFTC Director of Enforcement David Miller. He noted that the settlement underscores the Commission’s approach to encouraging cooperation in investigations.
This resolution marks the first individual case fully settled by the CFTC in its ongoing enforcement actions against FTX, which began in December 2022. Singh had admitted in a February 2023 guilty plea to maintaining code enabling Alameda Research to withdraw billions from the exchange without disclosure.
In October 2024, Singh testified against Bankman-Fried during his trial and was not sentenced to prison time for his cooperation.
“Quantifying someone’s role in building systems that facilitated fund misappropriation is challenging because systems are neutral,” explained Christian Ruz, business strategy director at crypto agency Hype. “Singh developed a centralized system managing deposits, customer funds, and trading activities,” he said, emphasizing the potential neutrality of such systems.
Following $8 billion in customer deposits being redirected to Alameda Research for various uses, FTX collapsed in November 2022, leading to criminal charges against five executives, an $12.7 billion CFTC judgment against corporate entities, and a bankruptcy process that has since distributed about $10 billion from an estimated $16 billion estate.
A fourth repayment phase worth $2.2 billion commenced this week.
Legal proceedings against FTX executives Gary Wang and Caroline Ellison remain pending on the CFTC’s civil docket, while Sam Bankman-Fried’s case is stayed as he awaits a new trial from federal custody.
Ruz predicts the remaining CFTC cases may take until mid-2027 to resolve. “Justice in such intricate cases can be lengthy,” he remarked.
In a recent interview with Dastan co-founder Farokh Sarmad, CFTC Chairman Michael Seli expressed concerns that insufficient regulation of prediction markets could lead to collapses similar to FTX’s, as the agency continues addressing its enforcement docket from that fallout.