Former FTX chief Sam Bankman-Fried borrowed hundreds of millions of dollars from Alameda Research to purchase his stake in trading app Robinhood Markets (HOOD), according to court documents
In an affidavit provided to a Caribbean court before his arrest, Bankman-Fried said he and FTX co-founder Gary Wang together borrowed over $546 million from Alameda via promissory notes in April and May. They used that money to capitalize Emergent Fidelity Technologies Ltd., the shell corporation that in May bought a 7.6% stake of Robinhood
The affidavit provides a new curveball in the three-way race to lay claim to the 56 million Robinhood shares. Crypto lender BlockFi, FTX Group and Bankman-Fried himself have all attempted to lay claim to the shares, which could be worth over $440 million.
Crypto lender BlockFi, which like FTX has filed for bankruptcy, alleged in a court document that it was owed the rights to the Robinhood shares due to a deal Bankman-Fried made in early November. The shares were pledged as collateral against a loan taken out by Alameda Research – the same firm whose funds were used to purchase the shares to begin with, according to Tuesday’s filing.
FTX, a crypto exchange, filed for bankruptcy in November after revelations that Alameda, a hedge fund that Bankman-Fried also owned, was largely backed by FTT tokens, digital assets that FTX created out of thin air.