FXT founder and former CEO Sam Bankman-Fried (SBF) bought a 7.6% stake in Robinhood earlier this year, borrowing more than $546 million from his trading firm Alameda Research.
The former billionaire teamed up with FTX co-founder Zixiao (Gary) Wang to borrow funds, according to an affidavit filed with the Antigua and Barbuda Superior Court on Dec. 12 before SBF’s arrest. They were used to support another FTX subsidiary, Emergent Fidelity Technologies, which purchased 56 million HOODs in May.
SBF Legally Owns 90% of Robinhood. The loan was evidenced by four promissory notes showing that SBF and Wang borrowed approximately $317 million and $176 million from Alameda on April 30, 2022, and May 15, 2022, respectively. On the same day Wang received the loan, Bankman-Fried received an additional $19 million from the firm, for a total of $554 million. Those funds were then given to Alameda to help it buy stock. However, the trading house paid around $650 million for the stake, with SBF alleging additional funding came from Wang.
According to the former FTX CEO, Emergent did not own any other assets other than its stake in Robinhood at the time of the purchase. Court documents also show that Bankman-Fried owns 90 percent of the shares, while Wang owns only 10 percent due to different contributions.
Those shares were later used by SBF and former Alameda Research CEO Caroline Ellison as collateral for a loan from crypto lending firm BlockFi. Interestingly, three parties are now vying for ownership of the stake after FTX and BlockFi filed for bankruptcy last month.
Yonathan Ben Shimon, one of the creditors of SBF, BlockFi, and FTX, has filed separate legal actions in various jurisdictions to claim Robinhood shares. Earlier this month, Bankman-Fried, who is currently under house arrest, filed a motion in U.S. bankruptcy court seeking assistance in purchasing assets currently held by brokerage firm ED&F Man Capital Markets (EDFM).
BlockFi, on the other hand, claimed the assets belonged to it, noting that the shares had been pledged to the company as collateral on Nov. 9. At this point, the cryptocurrency lender sued Bankman-Fried, demanding that he honor the deal.
I hope this article will help you to learn about SBF took $546 million from Alameda to purchase Robinhood shares. The final claimant, Yonathan Ben Shimon, a creditor of FTX, claimed that the common stock was purchased using client assets that were part of the bitcoin he had deposited on the exchange years before the company collapsed.
