When Nishad Singh, a previous engineering director at FTX, stood before the court earlier this week, he wasn't just another witness. He was a whistle-blower, casting light on the deep-seated issues within FTX. Singh's testimony against Sam Bankman-Fried, his former employer, unravelled a series of misdoings, including a software bug that concealed billions in lost funds, excessive expenditure on celebrities and lavish properties.
The Massive Accounting Error at FTX
Singh revealed a coding error that he had inadvertently helped create. This error led to improper accounting at FTX and Alameda Research. Consequently, Alameda exploited this glitch to quietly accumulate an $8 billion deficit using the funds of their customers.
"The software glitch hindered the correct accounting for the fiat@ FTX account – the error escalated to $8 billion," Singh shared. "I accidentally overheard a conversation between Gary and Adam Yedidia about it."
Extravagant Spending Habits of Bankman-Fried
In addition to the accounting mishap, Singh also narrated tales of Bankman-Fried's extravagant expenditures. Notably, he mentioned a $30 million penthouse in the Bahamas and an expenditure of over $1 billion on celebrity endorsement deals, real estate, and extravagant parties.
He described an event he attended at the Albany penthouse with Katy Perry, Orlando Bloom, Michael Kives, and Sam Bankman-Fried. Despite expressing his concerns about these excessive deals to Bankman-Fried, his objections were ignored.
Bankman-Fried's Shocking Indifference
Singh disclosed his feeling of betrayal and his confrontations with Bankman-Fried regarding Alameda's escalating debt. However, his concerns were met with surprising indifference. Despite a private discussion on a penthouse balcony, Singh remained apprehensive about the potential fallout if he left FTX.
Illegal Political Donations and Money Laundering
Singh also confessed to facilitating political donations through his personal account at Wells Fargo, following Bankman-Fried's orders. He mentioned a Signal chat named "Donations Processing" for money laundering, which involved SBF's brother Gabe, who was responsible for Guarding Against Pandemics (GAP).
Singh testified that he utilized Prime Trust and Wells Fargo accounts to channel contributions – unlawfully provided by Alameda – to Democrats, following the instructions of SBF. These donations were allegedly made in Singh's name for appearance's sake.
The Fallout of the FTX Scandal
Having pleaded guilty, the former FTX engineer has now become a cooperating witness against Bankman-Fried. His testimony offers an insider's perspective on the misuse of customer funds, acknowledged coding errors, and the extravagant lifestyle surrounding SBF that led to the shocking downfall of FTX.
What's your take on Nishad Singh's testimony? We invite you to share your thoughts and perspectives on this topic below.
Frequently Asked Questions
What are the pros & con's of a golden IRA?
An Individual Retirement Plan (IRA) has a major advantage over regular savings accounts. It doesn't tax any interest earned. An IRA is a good choice for those who want a way to save some money but don’t want the tax. There are some disadvantages to this investment.
For example, if you withdraw too much from your IRA once, you could lose all your accumulated funds. Also, the IRS may not allow you to make withdrawals from your IRA until you're 59 1/2 years old. A penalty fee will be charged if you decide to withdraw funds.
The downside is that managing your IRA requires fees. Many banks charge between 0.5%-2.0% per year. Other providers charge monthly management fees ranging from $10 to $50.
If you prefer to keep your money outside a bank, you'll need to purchase insurance. Many insurers require that you own at least one ounce of gold before you can make a claim. You might be required to buy insurance that covers losses up to $500,000.
If you are considering a Gold IRA, you need to first decide how much of it you would like to use. Some providers limit how many ounces you can keep. Others let you choose your weight.
You'll also need to decide whether to buy physical gold or futures contracts. Futures contracts for gold are less expensive than physical gold. However, futures contracts give you flexibility when buying gold. Futures contracts allow you to create a contract with a specified expiration date.
You will also have to decide which type of insurance coverage is best for you. The standard policy does NOT include theft protection and loss due to fire or flood. It does include coverage for damage due to natural disasters. If you live near a high-risk region, you might want to consider additional coverage.
In addition to insurance, you'll need to consider the cost of storing your gold. Storage costs are not covered by insurance. For safekeeping, banks typically charge $25-40 per month.
If you decide to open a gold IRA, you must first contact a qualified custodian. Custodians keep track of your investments and ensure compliance with federal regulations. Custodians don't have the right to sell assets. Instead, they must maintain them for as long a time as you request.
Once you've decided which type of IRA best suits your needs, you'll need to fill out paperwork specifying your goals. Information about your investments such as stocks and bonds, mutual fund, or real property should be included in your plan. The plan should also include information about how much you are willing to invest each month.
Once you have completed the forms, you will need to mail them to your provider with a check and a small deposit. The company will then review your application and mail you a letter of confirmation.
You should consult a financial planner before opening a Gold IRA. Financial planners are experts in investing and will help you decide which type of IRA works best for your situation. They can also help reduce your costs by suggesting cheaper options for purchasing insurance.
Can the government take your gold
You own your gold and therefore the government cannot seize it. It's yours, and you earned it by working hard. It belongs exclusively to you. However, there may be some exceptions to this rule. For example, if you were convicted of a crime involving fraud against the federal government, you can lose your gold. Your precious metals can also be lost if you owe tax to the IRS. You can keep your gold even if your taxes are not paid.
What does gold do as an investment?
Gold's price fluctuates depending on the supply and demand. Interest rates can also affect the gold price.
Due to their limited supply, gold prices fluctuate. Additionally, physical gold can be volatile because it must be stored somewhere.
How can I withdraw from a Precious metal IRA?
First, you must decide if you wish to withdraw money from your IRA account. Make sure you have enough cash in your account to cover any fees, penalties, or charges that may be associated with withdrawing money from an IRA.
Consider opening a taxable brokerage instead of an IRA if it is possible to pay a penalty if your withdrawal is made before the deadline. If you decide to go with this option, you will need to take into account the taxes due on the amount you withdraw.
Next, you'll need to figure out how much money you will take out of your IRA. The calculation is influenced by several factors such as your age at withdrawal, the length of time you have owned the account and whether or not you plan to continue contributing to retirement plans.
Once you know how much of your total savings to convert to cash, it's time to choose the type of IRA that you want. Traditional IRAs allow you to withdraw funds tax-free when you turn 59 1/2 while Roth IRAs charge income taxes upfront but let you access those earnings later without paying additional taxes.
After these calculations have been completed, you will need to open a brokerage bank account. Many brokers offer signup bonuses or other promotions to encourage people to open accounts. To avoid unnecessary fees, however, try opening an account using a debit card rather than a credit card.
You will need a safe place to store your coins when you are ready to withdraw from your precious metal IRA. Some storage facilities will take bullion bars while others require you only to purchase individual coins. You will need to weigh each one before making a decision.
Bullion bars, for example, require less space as you're not dealing with individual coins. However, each coin will need to be counted individually. However, keeping individual coins in a separate place allows you to easily track their values.
Some prefer to store their coins in a vault. Others prefer to place them in safe deposit boxes. You can still enjoy the benefits of bullion for many years, regardless of which method you choose.
Can I have a gold ETF in a Roth IRA
You may not have this option with a 401(k), however, you might want to consider other options, like an Individual retirement account (IRA).
A traditional IRA allows for contributions from both employer and employee. Another option is to invest in publicly traded corporations with an Employee Stockownership Plan (ESOP).
An ESOP is a tax-saving tool because employees have a share of company stock as well as the profits that the business generates. The money you invest in the ESOP will be taxed at a lower rate than if it were directly held by the employee.
You can also get an Individual Retirement Annuity, or IRA. An IRA allows for you to make regular income payments during your life. Contributions to IRAs do not have to be taxable
What are the fees associated with an IRA for gold?
$6 per month is the Individual Retirement Account Fee (IRA). This includes the account maintenance fees and any investment costs associated with your chosen investments.
To diversify your portfolio you might need to pay additional charges. The fees you pay will vary depending on the type of IRA that you choose. Some companies offer checking accounts for free, while others charge monthly fees for IRA account.
Most providers also charge an annual management fee. These fees can range from 0% up to 1%. The average rate per year is.25%. These rates are usually waived if you use a broker such as TD Ameritrade.
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- 7 U.S. Code SS7 – Designation of boards for trade as contract markets
- 26 U.S. Code SS 408 – Individual retirement account
- Saddam Hussein's Invasion Helped Uncage a Bear In 1990 – WSJ
- Want to Keep Gold in Your IRA at Home? It's Not Exactly Lawful – WSJ
Guidelines for Gold Roth IRA
It is best to start saving early for retirement. It is best to start saving for retirement as soon you can (typically at age 50). It is important to invest enough money each and every year to ensure you get adequate growth.
You can also take advantage of tax-free savings opportunities like a traditional 401k (k), SEP IRA (or SIMPLE IRA). These savings vehicles allow you the freedom to contribute without having to pay tax on your earnings until they are withdrawn. These savings vehicles are great for those who don't have access or can't get employer matching funds.
It's important to save regularly and over time. If you don't contribute the maximum amount, you will miss any tax benefits.
By: Jamie Redman
Title: Unveiling the Hidden Truths of FTX Scandal: A Former Insider Speaks Out
Sourced From: news.bitcoin.com/ftx-engineer-reveals-8b-bug-lavish-spending-and-political-donations-in-explosive-testimony-against-bankman-fried/
Published Date: Mon, 16 Oct 2023 22:30:13 +0000