Just-In: Sam Bankman Fried used $546 Mn from Alameda Research to buy Robinhood shares
According to court documents, Sam Bankman-Fried was the former CEO of FTX and took out loans from Alameda Research totaling hundreds of million dollars to fund his massive purchase of Robinhood shares. In court, the disgraced crypto tycoon stated that Alameda loans were used to purchase a staggering 7.6% stake in the stock broker and crypto exchange. SBF provided evidence in court that the source of funding for Robinhood’s stock purchase shortly before he was taken into custody in December.
SBF Buys Robhinhood
Further, the court affidavit stated that Gary Wang, a co-founder of FTX, and Bankman-Fried borrowed nearly $600 million from FTX trading arm, Alameda. This was through promissory bills in April and May. The money was then used for Emergent Fidelity Technologies Ltd., a shell company that was used to pay forward the purchase of 7.6% in Robinhood.
To oversee their Robinhood investments, the two created Emergent Fidelity Technologies (Antigua) together. According to court filings, Gary owned 10% of Emergent and Bankman-Fried 90%.
Gary and I borrowed funds from Alameda Research Ltd. to capitalize Emergent in order to make Robinhood’s investment. Emergent then used those funds for Robinhood acquisitions.
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Who owns the shares?
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CoinGape reported that BlockFi, a troubled cryptocurrency lender, claimed ownership of Sam’s Robinhood. This year, BlockFi also filed for bankruptcy. The attorneys for the bankrupt exchange requested a judge to freeze the assets in order to protect creditors, debtors and claimants. According to the affidavit, the CFTC & SEC claimed that Alameda had provided loans for top executives and individuals from Bankman-Fried’s defunct cryptocurrency firm.
According to the CFTC lawsuit, Alameda Research allegedly stole funds from FTX customers before the trading giant entered insolvency on May 20, 2022.
Bankman-Fried was not charged with criminal negligence prior to his arrest in the Bahamas and his subsequent extradition to the United States. Alameda CEO Caroline Ellison pleaded guilty to taking customer money from the FTX crypto exchange of SBF and sending it to her trading business.
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