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On Tuesday, the Eastern Caribbean Supreme Court released a document revealing that former FTX executives Sam Bankman-Fried and Gary Wang borrowed loans from the trading firm Alameda Research to purchase stock in the publicly traded exchange Robinhood.

Meanwhile, crypto lending platform BlockFi is contesting the ownership rights of those Robinhood shares in the federal court. BlockFi claims that Bankman-Fried pledged the shares to them. In the filing, the former billionaire cites that together with Wang, they formed a new firm, Emergent, to buy shares worth $540 million in Robinhood.

SBF Explains how He Partnered With Wang to Raise $540 Million

Bankman-Fried says he borrowed about $490 million, while Gary borrowed $50 million from Alameda Research. He adds that the total amount evidenced by promissory notes got utilized as Emergent’s working capital to buy the shares in Robinhood.

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Bankman-Fried cites that he and Wang took out four loans from the trading firm: $316 million and $35 million on April 30, and $174 million and $15 million on May 15. However, he explains that the pair did not take the loans simultaneously but got paid out in portions over the days mentioned in the filing.

The FTX ex-CEO is facing eight charges, including wire fraud and money laundering, which allegedly caused Alameda Research and FTX to collapse. In addition, U.S. authorities accuse Bankman-Fried of taking money from unknowing FTX users and using it to place bets through his firm Alameda Research.

BlockFi Sues SBF for Allegedly Defaulting on His Pledge

Making matters worse for the former billionaire is BlockFi. In mid-November, the Financial Times revealed that the bankrupted lender had sued Bankman-Fried to take ownership of his Robinhood shares he allegedly pledged to the firm as collateral at the beginning of that month.

Bankman-Fried’s filing with the Securities and Exchange Commission shows that he purchased his 7.5% stake in Robinhood Markets Inc in May. BlockFi claims that FTX’s ex-executive promised his Robinhood stake as collateral to the firm to solve its liquidity problems.

According to the BlockFi lawsuit, the firm says Bankman-Fried’s Emergent did not fulfill its obligations under the pledge agreement. In addition, many suggest that Bankman-Fried could have defaulted on his pledge after Binance also withdrew from a deal that would have sorted FTX liquidity issues.

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James Davis

By James Davis

James Davis is a prominent crypto writer and analyst at Herald Sheets, recognized for his well-researched articles and thorough analysis of the dynamic digital currency market. Holding a degree in Economics from Harvard University, James combines his academic background with a keen interest in cryptocurrency to provide readers with the latest industry insights and trends.