Sam Bankman-Fried has stated that he and former executive Gary Wang borrowed more than U.S. $546 million from Alameda Research to buy a nearly 8 percent stake in Robinhood Markets, according to court documents released on Tuesday.
This stake has about 56 million shares and is the main focus of a multi-jurisdictional ownership fight currently taking place out in Antigua, New Jersey, and Delaware. FTX, BlockFi Inc, and an individual FTX creditor are trying to assert claims to the shares.
Emergent Fidelity Technologies owns the Robinhood shares at the moment but BlockFi is suing for control of its shares, claiming they back a loan made to Alameda.
In an affidavit submitted to a judge in Antigua earlier this month, Bankman-Fried said the US$546 million in loans from Alameda were “capitalized into” Emergent Fidelity. Hence, SBF owns 90 percent of Emergent while Wang owns 10 percent.
The original affidavit was filed in the Eastern Caribbean Supreme Court in Antigua on December 12, the day of Bankman-Fried’s arrest. Manhattan prosecutors have charged him with conducting a years-long fraud that put at risk billions of dollars of customer funds.
He is looking at a long prison time and high monetary fees especially considering that his former partner Wang has also left him and cut a deal with prosecutors.
Investigators claim that Bankman-Fried himself directed FTX executives to move Alameda’s total of $8 billion in liabilities to an unknown customer account on the crypto exchange’s system.
Before the notorious scandal, Bankman-Fried’s FTX was the world’s second-largest crypto exchange. It went down after a liquidity crunch pushed the company into bankruptcy, evaporating the entrepreneur’s $16 billion fortune in a week.
Bankman-Fried was later arrested in the Bahamas. He is now on bail and living in California as he awaits the outcome of his trial.
So far, the public knowledge is that Alameda Research borrowed billions of dollars from FTX to invest in multiple deals and trades. These investments did not succeed and further investigation revealed that the money came from FTX customer deposits.