Funviralpark
New York
CNN
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When Sam Bankman-Fried bought a nearly 7.6% stake in popular stock trading app Robinhood earlier this year, he financed the deal with more than $500 million borrowed from his own hedge fund. Collecting client funds from his affiliated platform, FTX.
Bankman-Fried said in an affidavit released Tuesday that he and FTX co-founder Gary Wang had borrowed more than $546 million from hedge fund Alameda Research, largely due to Bankman-Fried’s It said it purchased Robinhood shares through a holding company that it controls. .
Wang has since pleaded guilty to four counts of fraud and conspiracy, working with US prosecutors investigating the collapse of FTX. Bankman-Fried was indicted on eight counts of his crimes. Since leaving FTX, he has repeatedly denied knowingly fraudulent. No arraignment date has been set for him. He was arrested in the Bahamas, home of FTX, earlier this month and was extradited to the United States last week. He is under house arrest at his parents’ home in California and could face life in prison if convicted.
Bankman-Fried’s stake in Robinhood is now at the center of another multinational legal battle over assets related to FTX’s bankrupt cryptocurrency empire.
Four separate parties claim ownership of approximately 56 million shares worth approximately $450 million. FTX’s new management is trying to get money back for investors and customers of the bankrupt platform, but Bankman-Fried has taken control of the stock from his 90%-owned Antigua-based holding company. I would like to.
According to FTX, Bankman-Fried himself has claimed ownership of the stake and is seeking a source of legal costs. claim.
Because of the competing claims, FTX filed a complaint in Delaware bankruptcy court earlier this month to keep the assets frozen until the court “can resolve the matter in a manner that is fair to all of the debtor’s creditors.” rice field.
It is not clear from the court filings whether the $546 million used to purchase the shares included funds that prosecutors say were stolen from FTX customer deposits.
Prominent crypto lender BlockFi has suspended withdrawals after FTX was unraveled, citing significant exposure to the trading platform. It filed for bankruptcy on Nov. 28, just two weeks after FTX, Alameda and dozens of affiliates went bankrupt.
BlockFi is suing Bankman-Fried over Robinhood shares. BlockFi alleges Alameda owes him $680 million after he defaulted on a secured loan obligation.
Earlier this month, Robinhood CEO Vlad Tenev told CNBC that it’s “surprising” that FTX stock is one of the most valuable assets on FTX’s books because it’s in a publicly traded company. It doesn’t matter,” he said.
“There’s not much information that you guys don’t have. We’re just watching this unfold and will probably be stuck in bankruptcy proceedings for a while.”
Meanwhile, the recent cryptocurrency crash has been disastrous for Robinhood. The company laid off 23% of its workforce in August after cutting 9% of its workforce in April. Stocks of online brokerages have plummeted as trading dried up.
