Summary:
- BlockFi and FTX are in contention over 56 million shares in trading giant Robinhood.
- The shares are currently controlled by Emergent Fidelity Technologies, a company owned almost entirely by fallen crypto billionaire Sam Bankman-Fried.
- BlockFi argued ownership of the Robinhood stock as part of a deal with Bankman-Fried but FTX pushed for the assets to stay frozen.
FTX filed a motion in a bid to freeze around $450 million in Robinhood shares as bankruptcy creditors battle over control for Sam Bankman-Fried’s massive investment in the trading giant.
The assets in question are some 56 million shares in equity and crypto trading platform Robinhood. Bankman-Fried bought his stake in Robinhood for $600 million back in May 2022. According to the court filing, the shares are currently owned by Emergent Fidelity Technologies. Notably, SBF owns 90% of the company and controlled its operations.
BlockFi Sues For Robinhood Stock
BlockFi sued the fallen exchange Founder over his Robinhood shares. The bankrupt crypto broker claimed that Bankman-Fried pledged his 56 million shares as part of a deal. BlockFi also claimed the agreement was reached FTX declared bankruptcy on November 11.
Other claimants of SBF’s Robinhood stock include Yonathan Ben Shimon (creditor), and Sam Bankman-Fried himself, per the court filing.
FTX Ask Judge To Freeze SBF’s Robinhood Stock
The bankrupt crypto exchange responded to BlockFi and other claimants by asking the judge to freeze Bankman-Fried’s shares in Robinhood. Instead, lawyers representing the disgraced exchange argued to maintain the asset freeze until the bankruptcy court deliberate on the best resolution for all parties.
The fact that multiple prepetition creditors of different Debtors and Mr. Bankman-Fried are all seeking to obtain possession of the Robinhood Shares demonstrates that the asset should be frozen until this Court can resolve the issues in a manner that is fair to all creditors of the Debtors.
BlockFi’s complaint is one of several against SBF’s shattered crypto empire. Court filing revealed at least $3 billion owed to the top 50 creditors. Over 1 million creditors also failed claims. The bankruptcy court chose crypto market maker Wintermute and Genesis entity GGC International as part of the Unsecured Creditors Committee.