Former FTX chief executive Sam Bankman-Fried reportedly borrowed more than $546 million from subsidy research firm Alameda Research to buy Robinhood shares, later used for collateral to receive a loan from bailout provider BlockFi.
The Antigua and Barbuda High Court received Bankman-Fried’s affidavit on 12 December was publicised on 27 December. The document showed that he and Zixiao “Gary” Wang had received loans via four notes from April to May.
The firm received the four loans valued at $316.6 million, $35.1 million, $19.4 million, and $175 million. Bankman-Fried and Wang received the first two on 30 April and latter two on 15 May, respectively.
Bankman-Fried later funded Emergent Fidelity Technologies Ltd, his shell company based in Antigua, used to buy 7.6 percent of total shares from Robinhood, totalling $648 million, in May.
The news could cause troubles as the company battles for its acquired Robinhood shares worth more than 56 million, worth roughly $430 million.
Conversely, BlockFi has launched a countersuit against Emergent, stating the firm had used the loans money for collateral for its BlockFi loans on 9 November.
In a plea deal, former Alameda chief executive Caroline Ellison said in a 23 December testimony that Alameda had been “borrowing funds that FTX’s customers had deposited onto the exchange.”
The news comes after FTX requested US judges to block BlockFi from receiving the money, just shortly after Sam Bankman-Fried’s two main firms filed for Chapter 11 bankruptcy in November. FTX argued in the case that laws protected it from debt collectors.
