Sam Bankman-Fried, founder and former chief executive officer of bankrupt cryptocurrency exchange FTX.com, took funds from his trading firm, Alameda Research, to buy shares of trading app Robinhood, court documents revealed on Tuesday.
See related article: FTX asks court to keep US$450 mln Robinhood shares frozen
- In an affidavit provided to the Eastern Caribbean Supreme Court, Bankman-Fried affirmed that he and FTX cofounder Gary Wang borrowed US$546 million from Alameda in April and May.
- Bankman-Fried had previously stated his independence from Alameda’s finances, a crypto trading firm he started in 2017.
- The funds went into Emergent Fidelity Technologies, a Bankman-Fried holding company, which acquired a 7.6% stake in Robinhood in May.
- After Emergent Fidelity Technologies purchased the Robinhood shares, Alameda allegedly pledged Robinhood shares as collateral for a loan from crypto lender BlockFi in November.
- BlockFi filed a lawsuit last week against Emergent Fidelity Technologies to lay claim to the Robinhood shares. FTX creditors Yonathan Ben Shimon and Bankman-Fried have also filed court actions in attempts to gain control of the assets.
- Last week, FTX lawyers requested that about US$430 million worth of shares remain frozen as FTX’s legal proceedings unfold.
- New FTX CEO John J. Ray III told Congress on Dec. 13 that the exchange lost US$8 billion of customer money, and that executives of Bankman-Fried’s firms were given access to customer assets.
See related article: FTX customers file lawsuit for priority repayment