Key Points
- CFTC orders Nishad Singh to pay $3.7 million in disgorgement over FTX misconduct.
- Sanctions reflect cooperation with investigators in broader $8 billion customer fund case.
Nishad Singh, former Director of Engineering at FTX and FTX US, has been ordered by the Commodity Futures Trading Commission (CFTC) to pay $3.7 million in disgorgement under a supplemental consent order finalized on April 1, 2026.
The order resolves the agency’s civil enforcement action related to the misappropriation of more than $8 billion in customer funds that preceded FTX’s November 2022 collapse.
Singh previously pleaded guilty to federal criminal charges and cooperated with the Department of Justice.
He did not receive a custodial sentence in the criminal case, and the CFTC did not impose an additional civil monetary penalty beyond the disgorgement amount.
The FTX investigation relied in part on testimony from insiders with knowledge of the company’s technical infrastructure.
Regulators examined how specific code features enabled the movement and use of customer funds.
Engineering Role and CFTC Findings
Singh served as engineering lead at FTX, reporting directly to founder Samuel Bankman-Fried and overseeing development across FTX and Alameda Research.
In February 2023, the CFTC amended its December 2022 complaint to charge Singh under the Commodity Exchange Act with fraud by misappropriation and aiding and abetting.
According to the agency, Singh implemented an “allow negative” function in 2019 that permitted Alameda Research to maintain negative balances on the exchange.
This feature effectively extended undisclosed credit backed by customer deposits.
In August 2020, he modified the platform’s liquidation system to exempt Alameda from automatic liquidation protocols that applied to other users.
Regulators also stated that Alameda’s borrowing limit was increased to $65 billion without disclosure to customers or counterparties.
The $3.7 million disgorgement relates to Singh’s October 2022 purchase of residential property, funded by withdrawals traced to misappropriated customer assets.
The amount aligns with parallel criminal forfeiture proceedings and represents the return of profits derived from misconduct rather than a separate penalty.
An earlier consent order in April 2023 permanently barred Singh from violating the Commodity Exchange Act.
The April 2026 supplemental order formalized the disgorgement, a five-year trading ban, and an eight-year prohibition from registering with CFTC-regulated entities.
CFTC officials indicated that the financial terms reflected Singh’s cooperation during the investigation.
The case demonstrates how enforcement outcomes may account for assistance provided in complex financial fraud investigations involving digital asset platforms.
