FTX, which was once one of the world’s largest trading platforms from cryptocurrencies, filed for bankruptcy this week after a bailout from a larger rival Binance collapsed and the chances of other rescue funding went bleak.
FTX chief executive Sam Bankman-Fried, who resigned from his post, is now being investigated for his role in a multi-billion dollar scandal that may have led to the company’s collapse.
Panicked customers rushed to withdraw funds from FTX, and the company is now on the brink of collapse, with a banner message on its website announcing it is “currently unable to process withdrawals”.
This is not the first such rapid disintegration we have seen in the loosely regulated world of cryptocurrency, and it's unlikely to be the last.
Indian-origin Nishad Singh is under scanner for the financial practices that led to the collapse of FTX, the Bahamas-based crypto exchange that had a meteoric rise to prominence, and was valued at more than USD 30 billion earlier this year.
He lived with the FTX founder along with 9 others. Singh was in the inner circle of FTX’s 30-year-old founder, Sam Bankman-Fried.
"Gary Wang (Chief Technology Officer), Nishad and Sam control the code, the exchange’s matching engine, and funds," said a person familiar with the matter.
Singh joined Alameda research, FTX’s sister organisation which is at the centre of the controversy, in December 2017. Before entering the crypto world, he worked as a software engineer at Facebook for five months.
At Alameda Research, he was Director of Engineering for 17 months. He then moved to FTX in April 2019, and has been there in the same top engineering post since.
All that has changed in the past two weeks. First, concerns emerged about links between FTX and an asset-trading firm called Alameda Research, including suggestions that customers' funds have been transferred from FTX to Alameda.
A few days later, rival firm Binance (the biggest crypto exchange) announced it would sell its holdings of FTT tokens, a crypto that reportedly comprises much of Alameda's assets.
