Disgraced FTX founder Sam Bankman-Fried borrowed $546 million from Alameda Research to buy Robinhood stock this year, according to new court documents.
The charged 30-year-old admitted that he and co-founder Gary Wang took the money to buy the 7% stake in Robinhood, according to a Bankman-Fried affidavit made in a Caribbean court before his arrest that has was released on Tuesday.
Bankman-Fried last week denied using company funds to make the purchase as part of the bankruptcy battle with current FTX CEO John Ray, who is seeking to recoup hundreds of millions. dollars from the alleged cryptocurrency scammer, according to US court documents.
Bankman-Fried claimed he was entitled to Robinhood’s stake because he was the sole owner of the holding company, Antigua-incorporated Emergent Fidelity Technologies, which completed the acquisition.
But according to the Bahamas court filing, Bankman-Fried admitted to funneling the money from FTX-owned Alameda to Emergent.
Alameda, which was run by Bankman-Fried’s ex-lover Caroline Ellison, was at the center of FTX’s implosion. Last month, Reuters reported that Bankman-Fried secretly moved $10 billion in funds from FTX clients to back Alameda’s risky bets.
The latest bombshell complicates an ongoing legal battle over who owns Robinhood’s stake – now valued at around $440 million – after FTX filed for bankruptcy on Nov. 11.
Now bankrupt digital asset lender BlockFi also claims to have a claim on the shares. BlockFi, which was acquired by FTX in June, alleges that Bankman-Fried pledged the 56 million Robinhood shares to their company as collateral against a loan from Alameda.
“I’m not surprised that this is one of the most valuable assets they have on their balance sheet, because it’s the shares of a public company,” Robinhood CEO Vlad Tenev told AFP. CNBC earlier this month.
Also on Tuesday, federal prosecutors were investigating an alleged cybercrime that drained more than $370 million from FTX hours after it filed for bankruptcy, Bloomberg News reported, citing a person familiar with the matter.
The criminal investigation into the stolen assets, launched by the Justice Department, is separate from the fraud case against Bankman-Fried, the report adds.
A spokesperson for the Manhattan U.S. Attorney’s Office said it could not confirm or comment on the matter, while the DOJ and FTX did not immediately respond to a Reuters request for comment.