Court documents in the Caribbean are revealing new ways that former FTX CEO Sam Bankman-Fried misallocated customer funds before the exchange’s collapse.
In the official Caribbean Supreme Court affidavit from Sam Bankman-Fried, SBF puts it on record that funds were borrowed from Alameda Research to purchase shares in Robinhood.
First, Bankman-Fried confirms that the shell corporation Emergent Fidelity Technologies Ltd acquired over 56 million shares in Robinhood.
“Emergent did acquire 56,273,469 shares in Robinhood Markets Inc as stated by the Claimant in paragraph 7 of his affirmation…
I believe that the total purchase price was less than the sum of $648,293,886.33 referred to by the Claimant…
I suspect that the total acquisition cost was $546,381,737.10.”
Sam Bankman-Fried then explains that he and FTX co-founder Gary Wang agreed to incorporate Emergent in the Caribbean “to hold the investments that we wished to make into the shares of Robinhood.” SBF says he was made the sole director with 900 shares in Emergent going to him and 100 shares going to Gary – a shareholding ratio that remains to this day.
SBF confirms that Emergent’s purchase of Robinhood shares was funded by capital from Alameda Research.
“In order to capitalize Emergent so that it could make the investments into Robinhood, Gary and I agreed to borrow funds from Alameda Research Ltd.
Those funds were capitalized into Emergent and it used those funds to acquire the shares in Robinhood.”
The Caribbean court documents are the latest twist in the FTX collapse and SBF’s subsequent fall from grace. Bankman-Fried is currently confined to a Northern California home after posting a $250 million bond, the largest pretrial bond ever posted, while awaiting trial for fraud charges in the US.
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Source: https://dailyhodl.com/2022/12/27/sam-bankman-fried-borrowed-hundreds-of-millions-of-dollars-from-alameda-to-buy-robinhood-shares-court-documents/