SBF Bought Robinhood Stock With Money Borrowed From Alameda Research
The question of ownership of FTX’s shares of Robinhood stock has become more complicated.
FTX founder and former CEO Sam Bankman-Fried (SBF) told a court before he was arrested in the Bahamas that he and FTX co-founder Gary Wang borrowed $546 million from Alameda Research to capitalize Emergent Fidelity Technologies, which later bought the shares in Robinhood, CoinDesk reported Tuesday (Dec. 27), citing documents from a court in Antigua and Barbuda.
Even before this report, the ownership of the 56 million Robinhood shares worth $440 million was already in dispute, as they were being claimed by crypto lending platform BlockFi, FTX Group and Bankman-Fried himself.
As reported Thursday (Dec. 22), FTX Group reached out to a U.S. bankruptcy judge in an attempt to maintain its rights to the Robinhood shares. As Bloomberg reported, both BlockFi and FTX claim to own the shares, as both companies want to use them to recover from their debts.
“The Robinhood shares played a prominent role in the run-up to FTX’s implosion,” the report said. “They were touted in a spreadsheet as being some of the crypto empire’s most valuable, liquid assets amid efforts to drum up rescue financing.”
On Nov. 28, BlockFi sued Bankman-Fried to recover the shares in Robinhood.
The suit, filed in federal court in New Jersey, came on the heels of BlockFi’s bankruptcy filing that stemmed from a liquidity crisis caused by its exposure to the also-bankrupt FTX.
As PYMNTS reported Aug. 12, Bankman-Fried was rumored at the time to be thinking of buying Robinhood outright after snapping up the 7.6% stake — an offer he carefully said he hadn’t made but didn’t deny considering.
About four months later, after FTX and 130 affiliated firms had filed for bankruptcy protection, Robinhood CEO Vlad Tenev said the shares were tied up in bankruptcy court and he wasn’t sure what would happen with them.
“We don’t have a lot of information that you guys don’t have,” Tenev told CNBC on Dec. 6. “We’re just watching this unfold and … it’s going to be locked up in bankruptcy proceedings, most likely for some time. And so we’re just kind of seeing how that plays out.”