A recent report from the Wall Street Journal claims that FTX founder Sam Bankman-Fried borrowed hundreds of millions of dollars from his hedge fund Alameda Research — which allegedly took billions of customer money from FTX — to purchase shares of the stock trading platform Robinhood.
The Wall Street Journal reports that Sam Bankman-Fried, the founder of FTX, allegedly used hundreds of millions of dollars borrowed from Alameda Research, an affiliate trading firm of FTX that itself allegedly took billions of FTX customer money, to purchase shares of Robinhood.
Robinhood CEO Vladimir Tenev ( Noam Galai /Getty)
According to an affidavit submitted to the Eastern Caribbean Supreme Court before his arrest in the Bahamas, Bankman-Fried stated that he and his FTX co-founder, Gary Wang, borrowed over $546 million through four promissory notes in April and May of 2022. The funds were then used to acquire a 7.6 percent stake in Robinhood through a subsidiary company, Emergent Fidelity Technologies.
The affidavit indicated that Bankman-Fried and Wang owned 90 percent and 10 percent of Emergent, respectively. Wang, who was formerly the CTO of FTX, and Caroline Ellison, the former CEO of Alameda, both pleaded guilty to federal fraud charges last week.
Cryptocurrency lender BlockFi, which filed for bankruptcy in November, sued Bankman-Fried for his shares in Robinhood, claiming that it was entitled to the shares as they had been pledged to BlockFi as collateral for Alameda’s payment obligations. The agreement for the transfer of the shares was made in early November, but BlockFi alleges that the shares were never actually transferred.
Robinhood’s stock price is reportedly down nearly 40 percent since early November when FTX’s empire began to crumble.
Read more at the Wall Street Journal here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan
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