FTX founder SBF said Alameda Research loans were used to buy $546 million in Robinhood shares between April and May 2022.
In April and May, FTX co-founder Gary Wang borrowed about $600 million from Alameda, FTX's trading branch.
Sam Bankman-Fried, the former CEO of FTX, borrowed hundreds of millions of dollars in loans from Alameda Research to fund his huge acquisition of Robinhood shares, according to the case's documentation. A stunning 7.6% of the shares in the stock broker and cryptocurrency exchange was purchased with loans from Alameda, according to testimony from the disgraced crypto mogul in court. SBF disclosed in a court affidavit shortly before being imprisoned in December the funding source for his Robinhood stock scoop.
The court statement further said that in April and May, FTX co-founder Gary Wang jointly borrowed close to $600 million using promissory notes from FTX's trading division, Alameda. The funds were subsequently used to support Emergent Fidelity Technologies Ltd, a front company used to advance 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 capitalise Emergent so that it could invest in Robinhood. These money were financed into Emergent, which then utilised them to buy Robinhood stock.
As was previously reported on CoinGabbar, the problematic bitcoin lender BlockFi, which also filed for bankruptcy last 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 figures and certain employees of a Bankman shuttered cryptocurrency startup.
The CFTC's lawsuit claims that Alameda Research misappropriated money from FTX before the trading juggernaut declared bankruptcy in May 2022.
SBF rejected claims of criminal negligence before being detained in the Bahamas and later extradited to the US. However, Alameda CEO Caroline Ellison revealed in a plea agreement that she stole customer funds from SBF's FTX cryptocurrency exchange and sent them to her trading business.
