Bankman-Fried’s filing to the Eastern Caribbean Supreme Court illustrates that Robinhood shares valued at $546 million were funded by loans advanced by FTX affiliate firm – Alameda Research.
Bankman-Fried Details Funding of Shares’ Purchase
The affidavit released on December 27 by the Eastern Caribbean apex court details that former FTX chief executive Bankman-Fried, alongside the former head of technical operations Gary Wang, funded stock purchase in Robinhood through loans secured from Alameda Research.
The revelation by embattled Bankman-Fried wades into the contested ownership of shares in the publicly traded Robinhood Markets Inc.
Bankrupt crypto lender BlockFi filed a motion to the court claiming the shares were promised as collateral by Bankman-Fried’s investment channel – Emergent Fidelity Technologies.
Bankman-Fried admits in the affidavit of partnering with Wang to establish Emergent to facilitate the acquisition of the Robinhood shares. The affidavit discloses that Bankman-Fried borrowed $491,743,563.39 while Wang obtained $54,638,173.71. The filing adds that the duo capitalized the borrowed sums into Emergent Fidelity Technologies as its working capital to purchase the shares whose ownership is disputed.
The affidavit by Bankman-Fried clarifies that Alameda Research advanced the sums in four tranches, a reason for the variance observed in calculating the total shares acquired. The document outlines that on April 30 2022, the pair received $35,185,242.50 and $316,667,182.50. Fifteen days later, on May 15 Alameda advanced to the duo $19,452,931.21 and $175,076,380.89. The affidavit echoes Bankman-Fried’s filing with US SEC confirming the acquisition of a 7.6% stake in Robinhood in May 2022.
Also read:BlockFi Claims on Bankman-Fried’s Stake in Robinhood
The disclosure made by Bankman-Fried complicates the claim laid by BlockFi on the Robinhood shares. The bankrupt BlockFi initiated charges against Bankman-Fried and Emergent Technologies on November 28, seeking the Robinhood stock pledged as collateral in November.
The lawsuit refers to the pledge by Bankman-Fried to cede the stake to help BlockFi resolve the liquidity issues. In particular, BlockFi alleges Emergent defaulted on satisfying the obligations stipulated in the pledge agreement.
FTX Counters BlockFi Claims on Robinhood Shares
FTX counter arguments through a filing to the bankruptcy court seek protection against BlockFi debt-collecting efforts. FTX’s attorney accused BlockFi of circumventing the law to sue a solvent entity, Emergent, while the shares’ ownership is under Alameda Research.
FTX attorney submitted to retain the shares since the shares are subject to ongoing ownership claims by creditor Yonathan Ben Shimon. The submission sought an extension of the automatic stay to allow BlockFi and other creditors to participate in the orderly process of laying claims on the bankrupt’s firm assets.
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