Sam Bankman-Fried borrowed $546 million from his hedge fund to buy a Robinhood stake read full article at

When Sam Bankman-Fried purchased an almost 7.6 per cent stake in Robinhood, the popular stock-trading app, earlier this yr, he financed the take care of greater than half a billion {dollars} borrowed from his personal hedge fund — the entity that prosecutors say was illegally funnelling customer funds from its affiliated platform, FTX.
In an affidavit that emerged on Tuesday, Bankman-Fried mentioned he and FTX co-founder Gary Wang borrowed greater than $US546 million ($808 million) from the hedge fund, Alameda Analysis, which they used to buy the Robinhood shares through a holding firm primarily managed by Bankman-Fried.

Wang has since pleaded responsible to 4 counts of fraud and conspiracy, in cooperation with US prosecutors investigating FTX’s collapse.

FTX founder Sam Bankman-Fried leaves Manhattan Federal Courtroom after his arraignment and bail hearings on December 22. (Getty)

Bankman-Fried has been indicted on eight felony counts.

Since stepping down from FTX, he has repeatedly denied knowingly committing fraud; his arraignment date hasn’t been set.

He was arrested earlier this month within the Bahamas, the place FTX was primarily based, and extradited to the US final week.

He’s below home arrest at his mother and father’ dwelling in California, and if discovered responsible may face life in jail.

Bankman-Fried’s stake in Robinhood is now on the centre of a separate, multinational authorized battle over the belongings related to FTX’s bankrupt crypto empire.

4 separate entities have laid declare to the roughly 56 million shares, value about $US450 million ($667 million).

FTX’s new administration, which is making an attempt to claw again funds for traders and clients of the bankrupt platform, wish to wrest management of the shares from the Antigua-based holding firm 90 per cent owned by Bankman-Fried.

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Bankman-Fried himself claims possession of the shares, searching for a supply of cost for authorized bills, based on FTX.

Additionally claiming the Robinhood shares are bankrupt crypto lender BlockFi, and a person FTX creditor.

As a result of the competing claims, FTX filed a movement earlier this month to the Delaware chapter court docket to maintain the belongings frozen till the court docket “can resolve the problems in a way that’s honest to all collectors of the Debtors”.

It isn’t clear from the court docket filings whether or not the $US546 million ($808 million) used to buy the stake included funds that prosecutors allege have been stolen from buyer deposits in FTX.

Former FTX chief executive Sam Bankman-Fried, who faces fraud charges over the collapse of the bankrupt cryptocurrency exchange, walks from the Manhattan federal court after securing bail in New York City.
Former FTX chief govt Sam Bankman-Fried, who faces fraud prices over the collapse of the bankrupt cryptocurrency change, walks from the Manhattan federal court docket after securing bail in New York Metropolis. (REUTERS)

BlockFi, a distinguished crypto lender, halted withdrawals as FTX got here unravelled, citing important publicity to the buying and selling platform.

It filed for chapter on November 28, simply over two weeks after FTX, Alameda and dozens of associates went below.

BlockFi is suing Bankman-Fried for the Robinhood shares, which BlockFi claims it’s owed after Alameda defaulted on $US680 million ($1 billion) in collateralised mortgage obligations.

Earlier this month, Robinhood CEO Vlad Tenev informed CNBC that he is “not shocked” the stake is without doubt one of the extra priceless belongings on FTX’s books as a result of it’s a public firm’s inventory.

“We do not have a whole lot of info that you just guys do not have. We’re simply watching this unfold and it will be locked up in chapter proceedings, almost definitely for a while.”

In the meantime, the latest implosion of cryptocurrencies has been disastrous for Robinhood.

The corporate laid off 23 per cent of its employees in August after slicing 9 per cent of its staff in April.

The web brokerage’s inventory has been in freefall as buying and selling has dried up.

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