The crypto industry’s chain of bankruptcies has investors perpetually asking the same questions. When will clients of a given project’s assets be returned? Will the project be able to reorganize? What will this do to prices? The FTX bankruptcy is no different. However, given how high-profile the saga has been, there are more tough questions to be addressed. One in particular relates to founder Sam Bankman-Fried’s stake in Robinhood (NASDAQ:HOOD). The purchase was just one of many notable investments for the crypto magnate. And with new details around the sale, there is a lot of uncertainty about what will become of this stake.

Until the company’s bankruptcy, FTX and Bankman-Fried spent 2022 building a reputation as savvy investors. The company’s agreement to acquire BlockFi at the onset of the crypto winter had many investors believing it truly was immune to bearish market conditions. In September, it spent $1.4 billion on bankrupt Voyager Digital’s remaining assets.

Bankman-Fried himself was adding to his personal portfolio at this time, too. His stake in HOOD stock had certainly turned investors’ heads. The billionaire took a 7.6% stake in the e-trading platform back in May. Emergent Fidelity Technologies, Bankman-Fried’s personal holding company, represented him in the $648 million purchase.

The purchase stirred up excitement and wonder from investors. With a relatively large stake, many wondered whether Bankman-Fried would try to influence Robinhood, especially as it continues to expand its business dealings in the crypto space. This would also help to boost HOOD stock prices in the short term by over 20%.

Now, Bankman-Fried has lost everything; once worth over $15 billion, the disgraced executive now says he has just $100,000 in his bank account. But what happened to his Robinhood asset, and what will become of it next?

Sam Bankman-Fried’s Robinhood Stake Paid for With FTX Funds

The entire world now knows that FTX was very convincingly bluffing its way through the early months of crypto winter. But as the company falls apart from the inside, Sam Bankman-Fried’s Robinhood investment has come up once again. As it turns out, the Robinhood purchase was — much like everything else FTX did over the summer — paid for with investor funds. This complicates an already nuanced situation for the courts to parse through.

According to an affidavit to the Caribbean court, Bankman-Fried says he took out a $546 million loan from his company Alameda Research in April 0f 2022 and used the money to buy the Robinhood stake. As we know now, Alameda Research had been supplying FTX executives with billions of dollars in secret loans, presumably using customer funds.

This is sowing even more confusion about who is entitled to the shares. Bankman-Fried has long been asserting that the stake belongs to him. Emergent is his shell company, and as such, it should be his. Of course, this would be very helpful to the executive’s case, providing liquidity for his courtroom defense.

However, John Ray III, the creditor now in charge of FTX, says that the shares belong to FTX Group. Ray and his team have been searching far and wide for FTX assets that it can sell to help pay back the many clients it owes. Such a large stake in Robinhood would be an invaluable addition to the assets Ray has already dug up.

Even still, BlockFi has laid its own defensible claim over the assets. The company, bailed out by FTX early in the summer and now bankrupt once again, claims that Emergent Technologies’ broker had violated its contract by not turning the stake over to BlockFi.

In the meantime, the shares will remain tangled up in bankruptcy court until a judge rules on the rightful owner. Robinhood CEO Vlad Tenev says that the company is as unsure as anybody else as to what will happen to his company’s shares. “It’s going to be locked up in bankruptcy proceedings, most likely for some time,” says Tenev. “We’re just kind of seeing how that plays out.”