Sam Bankman-Fried The founder of FTX has confirmed that $546 million worth of Robinhood shares were purchased using loans provided by Alameda Research between April and May 2022.
Sam Bankman-Fried (SBF), the former CEO of FTX, obtained loans from Alameda Research totalling hundreds of millions of dollars in order to fund his significant acquisition of Robinhood shares, according to the case’s filings.
A whopping 7.6% of the shares in the stock broker and cryptocurrency exchange were purchased with loans from Alameda, according to testimony from the disgraced crypto tycoon in court. SBF disclosed in a court affidavit shortly before being detained in December the funding source for his Robinhood stock scoop.
Sam Bankman-Fried Purchases Robinhood
The court document further said that in April and May, Bankman-Fried and FTX co-founder Gary Wang jointly borrowed close to $600 million using promissory notes from FTX’s trading subsidiary, Alameda. The funds were subsequently used to support Emergent Fidelity Technologies Ltd, a front company used to promote the acquisition of a 7.6% share in Robinhood.
For the purpose of managing their Robinhood investment, the two established Emergent Fidelity Technologies in Antigua. According to the court documents, Bankman-Fried owned 90% of Emergent while Gary owned the other 10%.
Gary and I decided to borrow money from Alameda Research Ltd. to capitalize Emergent so that it could invest in Robinhood. This money was financed into Emergent, which was then utilized to buy Robinhood stock.
Who Possesses The Shares?
As was previously reported on CoinGape, the problematic crypto lender BlockFi, which also filed for bankruptcy this year, claimed ownership of Sam’s Robinhood. The bankrupt exchange lawyers asked a judge to order an asset freeze in order to safeguard the interests of creditors, debtors, and claimants.
The affidavit is said to support the CFTC and SEC’s allegations that Alameda gave loans to key people and particular employees of Bankman Fried’s-shuttered cryptocurrency company.
The CFTC’s lawsuit claims that Alameda Research stole money from FTX before the trading behemoth declared bankruptcy in May 2022. Bankman-Fried rejected claims of criminal negligence before being detained in the Bahamas and later extradited to the US.
Alameda CEO Caroline Ellison admitted transferring customer funds from SBF’s FTX crypto exchange to her trading company in a plea agreement.