SEC Charges Cryptocurrency Hedge Fund Manager and Software Developer with Fraudulent Misappropriation of Funds
In a case announced by the Securities and Exchange Commission (SEC), Ravindra Singh has been accused of conducting a fraudulent scheme in which customer funds of FTX, a crypto exchange he helped create, were diverted to Alameda Research, a crypto hedge fund owned by his partners. The complaint alleges that Singh developed software code that enabled this diversion, despite false assurances from his partners that the platform had sophisticated risk mitigation measures in place and that Alameda was just another customer. The SEC's complaint further alleges that, as FTX neared collapse, Singh withdrew approximately $6 million for personal use, including for a multi-million dollar house and charitable donations. The SEC is seeking an injunction barring Singh from violating federal securities laws, disgorgement of his ill-gotten gains, an officer and director bar, setting of civil penalties, and a conduct-based injunction that prohibits him from participating in the issuance, purchase, offer or sale of any securities, except for his personal accounts. In a parallel action, the U.S. Attorney's Office and the Commodity Futures Trading Commission have also charged Singh. The SEC is thankful to the U.S. Attorney’s Office for the Southern District of New York, the FBI, and the CFTC for their assistance.