Nishad Singh, formerly a top adviser to Sam Bankman-Fried, avoided prison time for his involvement in the FTX cryptocurrency exchange collapse, as a federal judge commended his cooperation with U.S. prosecutors.

At a hearing in Federal District Court in Manhattan, 29-year-old Mr. Singh received three years of supervised release, a surprising outcome in contrast to the lengthy sentences given to Mr. Bankman-Fried and other FTX executives. Judge Lewis A. Kaplan, who presided over the cases, praised Mr. Singh for his substantial assistance to the government and noted his relatively minor role in the scheme compared to his colleagues.

Judge Kaplan acknowledged Mr. Singh’s self-interest in cooperating but stated, “You did the right thing.”

Shortly after FTX’s collapse in November 2022, Mr. Singh pleaded guilty to participating in the $8 billion fraud and admitted to campaign finance violations as a “straw donor,” making donations in his name with company funds. Mr. Singh’s attorneys requested no prison time, and prosecutors also recommended leniency.

Mr. Singh is among several executives in Mr. Bankman-Fried’s business network charged with fraud. In March, Mr. Bankman-Fried, now 32, was sentenced to 25 years in prison after being convicted on multiple fraud and conspiracy charges. Other executives also received sentences for financial crimes, including Caroline Ellison, sentenced to two years, and Ryan Salame, who received seven and a half years for campaign finance offenses. Gary Wang, another executive, is awaiting sentencing.

A graduate of the University of California, Berkeley, Mr. Singh joined Alameda Research, Mr. Bankman-Fried’s crypto hedge fund, in 2017 as a software engineer and later became one of FTX’s senior executives, amassing significant wealth on paper. Over the years, he donated millions to support progressive political causes.

At Mr. Bankman-Fried’s trial, Mr. Singh testified in detail about FTX’s downfall, describing how it left him suicidal. His attorneys, Andrew Goldstein and Russell Capone, argued that he had offered “immediate and exemplary” cooperation. Mr. Singh left FTX’s Bahamas headquarters before it declared bankruptcy, collecting crucial text message evidence that contributed to Mr. Bankman-Fried’s prosecution.

Mr. Singh’s lawyers emphasized that he only became aware of the conspiracy involving user funds shortly before FTX’s collapse, and his role was much smaller than that of others involved. This argument was central to his sentence, with Judge Kaplan noting that his case differed significantly from Ms. Ellison’s.

Since the FTX scandal, Mr. Singh has resided in San Francisco with his fiancée, Claire Watanabe, a former FTX colleague. He now works as a software engineer at a private company and has recently developed products showcased at an AI conference.

In court, Mr. Singh was surrounded by his parents, younger brother, fiancée, and a supportive group of friends and family. In a brief statement, he expressed gratitude, saying, “I aspire to be worthy of their love.” Wearing a light gray suit and dark red tie, he smiled as the sentence was read, while his family embraced and wept.

After the sentence, Judge Kaplan addressed Mr. Singh’s parents, offering them reassurance: “I don’t see anything you did wrong.”