New court documents have revealed more information about the former FTX CEO. Sam Bankman-Fried appeared to have borrowed $546 million from Alameda Research to buy shares in Robinhood Markets, which accounts for an approximately eight percent stake.
Control of the Robinhood Shares
The transactions were recorded through several promissory notes in an affidavit given to a Caribbean court, which took place before Sam Bankman-Fried's arrest. The stake is equivalent to 56 million shares, according to Interesting Engineering.
Lately, companies have been fighting over control of the shares. The multi-jurisdictional battle over who owns the stake is happening in Antigua, New Jersey, and Delaware. Three of the entities who believe they have a claim are FTX, BlockFi, and an FTX creditor.
Currently, the shares are still under Emergent Fidelity Technologies' control, but BlockFi is suing for the stake and claiming that they back a loan that was made to Alameda. However, an affidavit was submitted to a judge in Antigua, New Jersey, adding Bankman-Fried into the ring.
Bankman-Fried previously denied that he used FTX's funds to buy the shares, but he did admit to funneling the money in the Bahamas court filing. Despite that, he may still be entitled to control of the shares seeing as he owned the majority of the company that holds the shares.
According to the affidavit, the mentioned $546 million loan was capitalized into Emergent Fidelity Technologies. Since that meant that Bankman-Fried owned 90% of the company, the shares could be his to claim as well. The remaining 10% is owned by Gary Wang.
What's in Store for the Disgraced FTX Founder
After being arrested in the Bahamas for wire fraud, securities fraud, money laundering, and more, Sam Bankman-Fried has been released from jail by paying a $250 million bond. According to Vox, this was the biggest pretrial bond to date.
Although they were close friends to Bankman-Fried, Caroline Ellison and Gary Wang are cooperating with federal prosecutors to build a case against the former FTX CEO. The two were also charged with fraud and pleaded guilty to them.
If all the charges lead to a conviction, these may add up leading to a very lengthy stay in prison for Bankman-Fried. According to Braden Perry, a partner at Kennyhertz Perry, it may not only be years behind bars but the rest of Bankman-Fried's life.
Federal sentencing is determined by a numeric system that accounts for the minimum and maximum sentence of a convict. In terms of rating, wire fraud rates at seven, which is equivalent to zero to six months of imprisonment.
However, the sentence is not fixed since it can be influenced by other mitigating factors and enhancements, added Perry. For instance, a loss above $550 million adds 30 points to the base level of offense, and records show that Bankman-Fried has defrauded billions of dollars.
This could result in not only a lifetime in prison but also the dismissal of possible supervised release, given that he's convicted on even one of the offenses that prosecutors will pursue, as mentioned in CNBC. This may significantly affect the FTX founder's claim to Robinhood Market shares.
