There was a time when some people from within and outside the cryptocurrency industry were supporting Sam Bankman-Fried (SBF).
They supported him despite the FTX crash because they felt that SBF had become the target of the corporates and people from inside the exchange.
However, more information coming in about the involvement of SBF in terms of purchasing shares of other companies using people’s funds is alarming.
The FTX communities are now filled with anger and disappointment as they come to know what SBF had been doing with their funds.
He was increasing his net worth with the funds of the investors and left them out of his pockets after the FTX crash.
SBF Misled the Investors and Used their Funds
The FTX exchange faced a major crash following the leak of a balance sheet. It showed how the FTX exchange had been lending funds to Alameda Research to back the FTX Tokens on the particular platform.
Alameda Research was the sister company of the FTX exchange, which was also founded by the disgraced founder of FTX. It was the trading platform that had been launched by SBF for investors.
People had been using the platform to perform trades and store their funds in cryptocurrencies.
However, they did not know that the funds they saw had backing from the funds borrowed from the FTX exchange.
All of these activities were done under the noses of the investors and the creditors. If they were to known about such activities, they would never let it happen in the first place.
Unfortunately, SBF played well enough to last this much longer, causing losses of billions to the affected investors on both platforms.
SBF Borrowed $546 Million from Alameda Research
The latest reports coming in from the FTX exchange and about Sam Bankman-Fried are going to make the investors even angrier.
It has been claimed that prior to the crash of the FTX exchange and Alameda Research, SBF had borrowed a huge amount from the latter platform.
The reports claim SBF had borrowed an amount well over $546 million. The funds borrowed were used for the purchase of shares belonging to Robinhood.
Shares were used as a Collateral
Further investigations have revealed that after acquiring the shares, SBF reached out to BlockFi for a loan.
He reportedly handed over the purchased shares to BlockFi as collateral for the loan he had borrowed from their platform.
Once again, it was the Alameda Research platform that had borrowed funds from BlockFi. The company has also filed for bankruptcy as it is also in a great deficit after the FTX and Alameda crash.
The court is Aware of the Entire Activity
It was on December 12 when an affidavit was filled and submitted on behalf of the founder of the FTX brand.
It was submitted at the Barbuda and the Antigua High Court. However, the affidavit was made public on December 27, where it provided information about the parties involved in the entire process.
The document confirms that it was Zixiao “Gary” Wang, the co-founder of FTX who accompanied SBF in the entire activity.
Both of them took loans from Alameda Research and then reached out to Robinhood to purchase the shares. They did the same with BlockFi as they took a loan from them using the Robinhood shares as collateral.
They confirmed that they had taken the loans in the month of April and May and had submitted four promissory notes for the same purpose.
Loans Taken from Alameda Research
The arrested co-founders revealed that they had taken loans of $316.6 million and $35.1 million respectively. The higher-valued loan was taken by SBF and the other one was taken by Wang.
They also took another loan where $175 million were received by Sam Bankman-Fried and $19.4 million were taken by Wang.