For his acquisition of Robinhood shares, he borrowed more than $546 million from Alameda Research, a subsidiary of the exchange.
Bankman-Fried used those shares as collateral for Alameda’s loan from BlockFi (1), one of the parties confirming ownership of shares. Bankman-Fried and FTX co-founder Zixiao “Gary” Wang secured the loan from Alameda through four promissory notes between April and May 2022, according to an affidavit (2) he and Wanga submitted to the High Court of Antigua and Barbuda on December 12 and made their arrests public on December 27.
As of April 30, Bankman-Fried and Wang had $316.6 million and $35.1 million in loans, respectively. Subsequently, two loans of approximately $175 million and $19.4 million were made to Bankman-Fried on May 15. The loans were used to finance the banker-fictitious Fried’s Antiguan business, Emergent Fidelity Technologies Ltd., which in May paid $648 million for a 7.6% interest in brokerage Robinhood.
How will this affect SBF’s case?
The discovery of the debts could intensify the ongoing legal battle over more than 56 million Robinhood shares, which are now worth about $430 million. BlockFi, a troubled cryptocurrency lender, is suing Bankman-Emergent Fried’s over alleged theft of Robinhood shares. It was pledged as security for loans issued by BlockFi to Alameda on November 9. On December 23, FTX intervened and sought the help of a U.S. bankruptcy judge to stop the claim on BlackFi shares. It claimed that Alameda owned the shares and that the FTX companies protect Robinhood’s ownership while looking at alternative claims.
The shares are being sought by Bankman-Fried and FTX lender Yonathan Ben Shimon. Earlier, Bankman-Fried was identified as the recipient of a $1 billion personal loan from Alameda, according to FTX’s Chapter 11 bankruptcy filings in the United States. According to the terms of his plea agreement, former Alameda CEO Carolyn Ellison said on Dec. 23 that Alameda “borrowed money that FTX’s customers paid at the exchange.”