The 56 million Robinhood Markets shares are currently valued around $450 million.
FTX, the embattled cryptocurrency exchange, has requested the intervention of a US bankruptcy judge to block crypto lending startup BlockFi from recovering approximately $450 million in Robinhood shares purchased by its former CEO Sam Bankman-Fried.
BlockFi filed a complaint on November 28 requesting that Emergent Fidelity Technologies, Bankman-holding Fried’s firm, turn up 56 million Robinhood Markets shares. The equities were allegedly used as security for loans made by BlockFi to cryptocurrency trading business Alameda Research.
Before resolving the BlockFi loans, FTX and Alameda both declared bankruptcy. FTX, on the other hand, said in a filing in a U.S. bankruptcy court that the statute shields the corporation from debt collection operations.
FTX stated that the shares are owned by Alameda Research and insisted that the beleaguered FTX firms keep the shares while other claims to ownership are investigated. Apart from BlockFi, the shares are claimed by Bankman-Fried and FTX creditor Yonathan Ben Shimon.
If the court rejects the plea to keep the shares, FTX has proposed an alternate strategy to “extend the automatic stay” on the assets. This will “guarantee that all creditors, including BlockFi and others, can participate in an orderly claims procedure,” according to the statement.
Bankman-Fried was recently given free after claiming to have only $100,000 in his bank and failing to meet the rigorous bail terms of $250 million. The bond was secured by the former FTX CEO’s parents utilizing the equity in their California home.
The crypto world was perplexed as to how Bankman-Fried was able to achieve the seemingly impossible criterion despite claiming that he didn’t have much money left. Some even accused the former FTX CEO of using stolen client monies to avoid prison. Others doubt Bankman-right Fried’s to spend the holidays in a fancy property.