FTX is locked in a legal battle to recover $440 million worth of Robinhood shares The new leadership of FTX is engaged in a legal tug of war with BlockFi and Sam Bankman-Fried in an attempt to acquire 56 million Robinhood (HOOD) shares. Currently held by an Antiguan company owned by SBF, these shares could allow FTX to increase its portfolio for the repayment of its disadvantaged users. Who will recover the Robinhood shares? According to a document filed with the bankruptcy court, the current leadership of FTX is seeking to recover $440 million worth of Robinhood (HOOD) shares, thus entering into a legal battle with, among others, troubled cryptocurrency lender BlockFi.
These shares are linked to an Antiguan company owned 90% by Sam Bankman-Fried, the former bankrupt CEO who has recently been released on bail for $250 million.
However, a problem arises in this case. Indeed, these shares are already coveted by 3 entities, namely:
Sam Bankman-Fried himself, who is reportedly seeking to pay his legal fees with these shares, according to FTX; BlockFi, which has been disadvantaged following the collapse of FTX; Emergent Fidelity Technologies, the Antiguan company owned mainly by SBF Thus, each party believes that the shares currently held by the Antiguan company rightfully belong to them as part of the bankruptcy procedure. As for Sam Bankman-Fried, he is said to have attempted to regain control of these shares on December 11, shortly before his initial arrest.
In addition, FTX, which hopes to recover the rights to these shares in order to consolidate its portfolio and potentially repay some of its creditors, is now engaged in a struggle with the court against 3 other parties. Furthermore, Caroline Ellison, the former CEO of Alameda Resarch, is said to have promised BlockFi that the Robinhood shares would belong to them shortly before the bankruptcy of FTX.
In parallel with the recently filed legal request, the current leadership of FTX is said to have requested that ED&F Man Capital Markets, the broker holding the Robinhood shares, freeze these shares on November 11th.
In the filed document, FTX urges the judge in charge of the exchange’s bankruptcy to oversee the freezing of these shares “until FTX finds a way to repay its creditors.”
The legal battle over the Robinhood shares is just one of the many controversies surrounding the collapse of FTX. The exchange, once hailed as a rising star in the cryptocurrency world, has faced a series of financial and legal issues in recent months, leading to the departure of its CEO and the appointment of a new leadership team. It remains to be seen who will ultimately emerge victorious in the battle for the valuable Robinhood shares, but one thing is certain: the legal fight is far from over.
