Sam Bankman-Fried wants to use Robinhood stake to pay lawyers

Indicted FTX founder Sam Bankman-Fried needs to make use of his contested $460 million Robinhood stake to fund his authorized protection — regardless of allegations that he acquired it using money he borrowed from his doomed crypto hedge fund Alameda Analysis.

Bankman-Fried’s attorneys petitioned a Delaware court docket on Thursday to return 56.3 million shares of the retail buying and selling platform’s inventory which are technically owned by an entity known as Emergent Constancy Expertise Ltd.

The 30-year-old holds a 90% stake in Antigua-based Emergent, which was not one of many greater than 100 FTX Group associates that filed for chapter in November.

“Mr. Bankman-Fried has not been discovered criminally or civilly responsible for fraud, and it’s improper for the FTX Debtors to ask the Courtroom to easily assume that the whole lot Mr. Bankman-Fried ever touched is presumptively fraudulent,” the attorneys mentioned in a submitting, according to Bloomberg.

Bankman-Fried’s attorneys asserted that his must cowl authorized prices outweighs any “financial loss” for FTX, the submitting added.

The Robinhood stake drew immediate scrutiny during FTX’s implosion. Prosecutors have alleged that Bankman-Fried stole billions of {dollars} in FTX buyer funds to get pleasure from a lavish life-style, make investments and canopy dangerous bets made by Alameda.

Bankman-Fried admitted in court docket filings that he and fellow FTX co-founder Gary Wang borrowed $546 million in funds from Alameda to accumulate a roughly 8% stake in Robinhood. It’s nonetheless unclear if that cash got here from FTX.

The controversy over who’s the rightful proprietor of the Robinhood stake is taking part in out in a number of court docket battles.

Bankrupt digital asset lender BlockFi has additionally laid declare to the stake, alleging that Bankman-Fried promised the shares as collateral in opposition to a mortgage from Alameda. A person FTX creditor, Yonatan Ben Shimon, has additionally claimed possession.

Elsewhere, new FTX CEO John Ray has pledged to determine and claw again any investments that had been made utilizing buyer funds as a part of efforts to make collectors financially complete.

On Wednesday, the Justice Division moved to seize the Robinhood assets. Prosecutors mentioned they didn’t imagine the shares fell into the chapter court docket’s jurisdiction and indicated competing claims to the inventory might be resolved in forfeiture proceedings.

The feds have slapped Bankman-Fried with eight fees that carry as much as 115 years in jail. The previous FTX CEO pleaded not responsible in Manhattan federal court docket this week.

Bankman-Fried claims to solely have about $100,000 left and has mentioned he’s unsure how he’ll cowl his authorized bills. He employed Ghislaine Maxwell’s former defense attorney, Mark S. Cohen.

In a December interview with CNBC, Robinhood CEO Vlad Tenev admitted the scenario was out of his firm’s fingers.

“I’m not shocked that it’s one of many extra beneficial belongings they’ve on their steadiness sheet as a result of it’s public firm’s inventory,” Tenev mentioned on CNBC’s “Squawk Field.”

“It’s going to be locked up in chapter proceedings, almost definitely for a while. And so we’re simply form of seeing how that performs out,” he added.

With Put up wires