Alameda lent Sam Bankman-Fried US$546 million for Robinhood stake

FTX founder Sam Bankman-Fried said he and former executive Gary Wang borrowed more than US$546 million from Alameda Research to buy a nearly 8 per cent stake in Robinhood Markets, according to court papers.

The pair borrowed the funds earlier this year. The transactions were documented in a series of promissory notes, detailed in an affidavit that surfaced in a dispute in US bankruptcy court in New Jersey on Tuesday.

The Robinhood stake – about 56 million shares in total – is at the centre of a multi-jurisdictional ownership fight playing out in Antigua, New Jersey and Delaware. FTX, bankrupt crypto lender BlockFi Inc and an individual FTX creditor are all trying to establish claims to the shares in separate legal proceedings.

BlockFi is suing Emergent Fidelity Technologies, the corporate entity that owns the Robinhood shares, for control of those shares, claiming they back a loan made to Alameda. FTX lawyers have said former Alameda chief executive Caroline Ellison pledged the shares to BlockFi just before FTX’s collapse.

Alameda’s borrowing from FTX is at the core of the fraud case against Bankman-Fried unfolding in Manhattan federal court. It’s unclear if the funds at issue in the bankruptcy dispute originated with FTX.

Bankman-Fried attested to the loans in an affidavit submitted to a judge in Antigua earlier this month, where Emergent Fidelity has been placed in insolvency proceedings. Lawyers for the company submitted the affidavit to BlockFi’s bankruptcy judge on Tuesday. The Wall Street Journal reported on the news earlier.

In his affidavit, Bankman-Fried said the US$546 million in loans from Alameda were “capitalised into” Emergent Fidelity. Bankman-Fried owns 90 per cent of Emergent and Wang owns the rest.