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Nishad Singh, a former senior engineer at the now-defunct cryptocurrency exchange FTX, testified on October 16 that the exchange’s former CEO, Sam Bankman-Fried, had considered a potential arrangement with Telegram for TON tokens.
Singh made these remarks while providing testimony in the ongoing legal proceedings against the former FTX CEO concerning financial misconduct and fraud.
FTX Proposed a Deal with Telegram
Singh acknowledged his involvement in deceiving customers and engaging in money laundering activities. He identified Bankman-Fried, Gary Wang, Caroline Ellison, and Ryan Salame as accomplices.
According to Singh, part of the scheme began last September when Sam Bankman-Fried was in the Middle East attempting to secure funding. The then-CEO suggested a deal with Telegram to acquire a substantial amount of TON tokens, which is Telegram’s cryptocurrency.
This arrangement would require FTX to invest $120 million. It was discussed in a Signal group named “hashtag meetings,” which included several key opinion leaders and members of the leadership team.
Subsequently, the CEO convened with the broader FTX team, outlining his strategy for the exchange to create a payment-processing service for Telegram. In return, FTX would receive $100 million worth of TON tokens.
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Despite concerns raised by Singh and other team members regarding the risks associated with acquiring illiquid tokens, Sam Bankman-Fried opted to proceed with the initiative. SBF informed the team:
“We’re going ahead with this, Ramnik and I are. You guys shouldn’t feel responsible for it. That’s not why I shared it. Unless you have any serious new objections, we’re going ahead.”
Later in October 2022, during the Singapore 2049 event, the Ton Foundation revealed a partnership with Telegram to develop the TON Space wallet. The objective of this collaboration was to strengthen Telegram’s presence in the cryptocurrency industry and encourage the adoption of digital assets. At this stage, FTX was not mentioned in the reports.
However, reports suggest that Telegram launched its self-custodial wallet on the TON blockchain a few weeks ago.
A Series of Questionable Financial Decisions
In addition to the proposed deal with Telegram, FTX, under SBF’s leadership, made several other questionable financial choices. Singh discussed the $1 billion investment in Genesis Digital Assets, a mining company based in Kazakhstan. Subsequently, FTX invested $500 million in Anthropic, a company focused on AI safety.
FTX also allocated another $200 million to K5 and even dined with prominent figures such as Jeff Bezos, Hillary Clinton, and the spouse of Kamala Harris. Singh noted that SBF was impressed by the connections with these influential individuals and other celebrities, believing that associating with them would benefit FTX.
The acquisition of properties, including the Penthouse, along with various political donations, was also mentioned by Singh during the proceedings.
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