•Sam Bankman-Fried and Gary Wang took out loans from Alameda Research to buy stock in Robinhood
• The ownership of the Robinhood shares is being contested by crypto lending platform BlockFi
• In the affidavit, Bankman-Fried says he and Wang formed a new company, Emergent, to acquire shares in Robinhood Markets Inc
• FTX filed for bankruptcy on November 11, 2022 after rival cryptocurrency exchange Binance announced that it would liquidate its position in FTT
Sam Bankman-Fried and Gary Wang, two of the founders of the crypto trading platform FTX, have been involved in a heated dispute over their ownership interest in Robinhood Markets Inc. After Bankman-Fried took out a loan from Alameda Research to buy stock in Robinhood, his partners Wang and BlockFi issued claims that they own the shares. This has led to an ongoing battle over who has the right to the stock and its value. To complicate matters further, Binance liquidated FTX’s FTT position, leading to FTX filing for bankruptcy.
The stakes are high and the story is getting increasingly complicated as ex-FTX CEO Sam Bankman-Fried and ex-FTX CTO Gary Wang took out loans from Alameda Research in order to purchase over half a billion dollars in Robinhood shares. This investment has been contested by crypto lending platform BlockFi, who claims that Bankman-Fried promised them the shares. In confirmation of this deal, Bankman-Fried filed an affidavit stating that he and Gary formed a new company, Emergent, to facilitate borrowing of loan money that they needed to buy Robinhood stock. It appears that their gamble paid off since the sum total came out to $546.4 million dollars. Whether BlockFi will be successful in claiming ownership of these shares for themselves or not remains to be seen.
The Role of Alameda Research in Robinhood Acquisition
Sam Bankman-Fried took out a loan from Alameda Research, a cryptocurrency market maker and algorithmic trading firm based in San Francisco California. The loan was used to purchase shares in Robinhood Markets Inc., an online stock brokerage firm founded by Baiju Bhatt and Vlad Tenev that offers commission-free trading services. Bankman-Fried claimed he was the sole owner of the Robinhood stock while his partners Gary Wang and BlockFi disagreed; they argued that since they had contributed capital to purchase the stock, they too should share ownership rights over it.
BlockFi’s Contention of Ownership Over Robinhood Shares
Wang and BlockFi formed a new company called Emergent with the intention of acquiring shares in Robinhood Markets Inc., claiming that this new entity would be given ownership rights over the stock purchased with Bankman-Fried’s loan from Alameda Research. This led to an ongoing dispute between all parties involved as each one sought to assert its legal authority over the contested stocks.
FTX Bankruptcy After Binance Liquidates FTT Position
The situation became even more complex when Binance liquidated FTX’s FTT position after it failed to meet its margin call demand earlier this month; this decision caused FTX’s total liabilities to exceed its total assets resulting in bankruptcy proceedings being initiated against it shortly thereafter. The implications of this move are still unclear; however, it is certain that it will have lasting effects on both FTX’s operations and its ability to uphold any legal action against either Wang or BlockFi regarding contested ownership rights over Robinhood shares moving forward.
Ongoing Battle
The ongoing dispute between Sam Bankman-Fried, Gary Wang, and BlockFi regarding contested ownership rights over shares purchased by Bankman-Fried through a loan from Alameda Research has become increasingly convoluted following Binance’s decision to liquidate FTX’s FTT position which resulted in bankruptcy proceedings being filed against it. While it remains unclear how this situation will ultimately be resolved, one thing is certain: It has already caused a significant disruption within the cryptocurrency industry as well as confusion for those who are trying to understand what exactly happened here. For now, at least, only time will tell how things will ultimately unfold between these three parties as they continue their fight for control over valuable assets held by Bankman-Fried’s new company Emergent.
