Sam Bankman-Fried Tries to Keep Ownership of $450M in Robinhood Shares
- Lawyers for SBF are seeking to block debtors from taking control over $450 million in Robinhood shares, arguing that SBF was relying on his stake to fund his criminal defense.
- Another argument was that SBF had legitimately bought the shares using money borrowed from Alameda Research, one of the few loans that was well documented in the company.
Sam Bankman-Fried, former CEO of FTX, speaking at the Binance Blockchain Week, Singapore, 19 January, 2019. Binance
Disgraced CEO Sam Bankman-Fried argued that the roughly $450 million in shares of trading app Robinhood should remain in his control as they were legitimately bought, a court filing from 5 January revealed.
According to the document, SBF’s lawyers argued that the 56.2 million shares in Robinhood did not belong to any of the FTX-related companies currently undergoing bankruptcy proceedings, and as such FTX had “no legal claim” over them. They also noted that SBF — who is currently facing eight criminal charges, including money laundering, securities fraud, and violating campaign finance laws — was relying on his stake in Robinhood to fund his criminal defence. The court filing reads:
“Mr. Bankman-Fried has not been found criminally or civilly liable for fraud, and it is improper for the FTX Debtors to ask the Court to simply assume that everything Mr. Bankman-Fried ever touched is presumptively fraudulent. The FTX Debtors have not shown that they have a reasonable likelihood of succeeding on the merits of a fraudulent transfer claim.”
The lawyers further argued that SBF and FTX co-founder Gary Wang had legitimately bought the Robinhood shares through Emergent Fidelity — 90% owned by SBF and 10% by Wang — using money borrowed from FTX’s sister company Alameda Research. While SBF is known for his poor bookkeeping this particular loan was well documented, with SBF and Wang using four promissory notes to acquire the money from Alameda.
The fight over the $450 million in Robinhood shares has been going on since December, when FTX — which at this point was undergoing bankruptcy proceedings, and was under new management — requested the shares be frozen until they could be divided among FTX’s creditors as they were only nominally held by Emergent Fidelity. Crypto lender BlockFi, a lawsuit filed by an FTX creditor, and the U.S. Department of Justice (DoJ) have all sought control over the shares.
- Karl Greenwood, co-founder of the OneCoin crypto pyramid scheme, was sentenced to 20 years in prison, and ordered to pay back the $300 million he made in commissions.
- Greenwood was the “global master distributor and the leader of the MLM (multi-level marketing) network” during his time in OneCoin, earning him 5% of all monthly sales.
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- The U.S. Department of Justice has expressed its concerns over Sam Bankman-Fried’s seven expert witnesses, and requested they be barred from testifying on the case.
- The DoJ claimed most of the proposed experts lacked the necessary foundation for their opinions, making them unqualified to be an expert witness.
- A cyber security incident at bankruptcy service provider Kroll has resulted in the exposure of “non-sensitive” customer data for claimants involved in the FTX and BlockFi cases.
- Both companies confirmed that account passwords, systems, and funds remained safe, but warned customers to be on the lookout for phishing scams.