Disgraced FTX Founder SBF Took Money from Alameda to Buy Robinhood Shares

UTC by Bhushan Akolkar · 2 min read
Disgraced FTX Founder SBF Took Money from Alameda to Buy Robinhood Shares
Photo: Unsplash

As per court documents, SBF and FTX co-founder Gary Wang took $546 million from Alameda Research to purchase the stock of Robinhood Markets.

As the case against disgraced FTX founder Sam Bankman-Fried proceeds, new developments have come to the surface. As per the recent court documents, FTX chief Sam Bankman-Fried together with the company’s co-founder borrowed hundreds of millions of dollars from its sister firm Alameda Research in order to purchase shares of a popular trading app Robinhood Markets (HOOD).

As per the affidavit produced in the Caribbean court ahead of the arrest earlier this month, SBF said that he and his co-founder Gary Wang borrowed a total of $546 million from Alameda. Later, they used that money to capitalize Emergent Fidelity Technologies Ltd. It was a shell corporation that purchased a 7.6% stake in Robinhood in May 2022.

This affidavit opens up new doors in the race to claim the 56 million shares of Robinhood. Along with Sam Bankman-Fried, crypto lender BlockFi and FTX Group are also attempting to claim the shares, which could probably be worth $440 million now.

After the FTX episode, crypto lender BlockFi has been facing major liquidity issues and had to file for bankruptcy. Additionally, the crypto lender has also slapped a lawsuit on Sam Bankman-Fried for its claim over the Robinhood shares.

New Judge Takes Up SBF’s Fraud Case

Citing a court filing, Reuters reported that the criminal case against FTX CEO Sam Bankman-Fried has been assigned to US Judge Lewis Kaplan. Judge Kaplan was also responsible for overseeing the high-profile defamation lawsuits against former US President Donald Trump.

The development comes as former appointee US District Judge Ronnie Abrams had to withdraw from the FTX case since her husband was a partner at the law firm Davis Polk & Wardwell which had advised FTX in 2021. In a filing last Friday, Abrams said:

“My husband has had no involvement in any of these representations. Nonetheless, to avoid any possible conflict, or the appearance of one, the Court hereby recuses itself from this action.”

US DoJ Launches Probe into FTX Hack

The US Department of Justice is now investigating the $400 million hack that happened just a few hours after the company filed for Chapter 11 bankruptcy last month. Bloomberg was the first to report this news citing an unidentified source.

The collapse of the crypto exchange FTX has been one of the biggest path-breaking incidents in the history of crypto. The US authorities have accused him of committing or conspiring to commit fraud, money laundering, and conspiracy to defraud US investors.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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