Disgraced FTX founder Sam Bankman-Fried took funds from his trading firm, Alameda Research, to buy Robinhood stock, court documents shows. Later, Alameda took out a loan and pledged those same shares as collateral, CoinDesk reported. SBF and FTX cofounder Gary Wang together borrowed over $546 million in promissory notes from Alameda in April and May. Loading Something is loading.
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Disgraced FTX founder Sam Bankman-Fried borrowed hundreds of millions of dollars from his own trading firm, Alameda Research, to fund purchases of Robinhood stock, according to court documents reported by CoinDesk Tuesday.
Later, Alameda took out a loan and pledged those same shares as collateral, CoinDesk said.
Bankman-Fried and FTX cofounder Gary Wang borrowed $546 million in promissory notes from Alameda in April and May, an affidavit provided to a Caribbean court showed.
Those funds went into Emergent Fidelity Technologies, which was the shell corporation that acquired a 7.6% stake in Robinhood in May.
Currently, Bankman-Fried is in the midst of a four-way legal battle for roughly $450 million in Robinhood shares with FTX’s new bosses, as well as failed crypto lender BlockFi and FTX creditor Antigua.
Now-bankrupt BlockFi alleged that it has rights to the Robinhood shares based on deals Bankman-Fried agreed to in November, a separate court document shows.
The development is the latest example to come to light of how the finances of FTX, Alameda and other pieces of Bankman-Fried’s empire were entangled.
A separate report found that FTX customers sent money to a fake electronics retailer, North Dimension, which had a website full of misspelled words and unusually priced items. The funds were subsequently used for Alameda’s trading activity, the Securities and Exchange Commission alleged.
“Bankman-Fried had directed FTX to have customers send funds to North Dimension in an effort to hide the fact that the funds were being sent to an account controlled by Alameda,” the SEC said in the complaint.
Bankman-Fried, meanwhile, is currently at his parents’ home in California under house arrest. Last week, he was extradited from the Bahamas to the US after being indicted earlier this month for various financial crimes and fraud.