Investigations Reveal that Bankman-Fried’s Hedge Fund Financed His Deal with Robinhood

Emerging reports show that when embattled former FTX boss Sam Bankman-Fried bought close to 7.6 per cent stake in Robinhood, the popular stock-trading app, earlier this year, “he financed the deal with more than half a billion dollars borrowed from his own hedge fund”.

According to the prosecutors, hedge fund “was illegally funneling customer funds from its affiliated platform, FTX.”

In an affidavit published this week, “Bankman-Fried said he and FTX co-founder Gary Wang borrowed more than $546 million from the hedge fund, Alameda Research, which they used to purchase the Robinhood shares via a holding company primarily controlled by Bankman-Fried.”

Per Allison Morrow, Wang has pleaded guilty to four counts of fraud and conspiracy while Bankman-Fried has been indicted on eight criminal counts.

Bankman-Fried, who has repeatedly denied knowingly committing fraud, is reportedly under house arrest at his parents’ home in California. He is expected to enter a plea in a federal court in Manhattan on January 3, The Kenya Times understands. 

According to Morrow, “Bankman-Fried’s stake in Robinhood is now at the center of a separate, multinational legal battle over the assets associated with FTX’s bankrupt crypto empire.”

Also Read: Sam Bankman-Fried Admits Responsibility for FTX Collapse

“Four separate entities have laid claim to the approximately 56 million shares, worth about $450 million. FTX’s new management, which is trying to claw back funds for investors and customers of the bankrupt platform, want to wrest control of the shares from the Antigua-based holding company 90% owned by Bankman-Fried,” he writes.

The beleaguered Robinhood is fighting bankruptcy claims and recently fired “23 per cent of its staff in August after cutting 9 per cent of its employees in April.”