FTX Claims Right Over $450M Robinhood Shares in U.S Bankruptcy Court

• Ownership of the shares is being disputed by three parties at present.
• BlockFi claims these shares had been pledged as security against $680M loan.

Sam Bankman-Fried’s defunct cryptocurrency exchange FTX is attempting to use the US Bankruptcy Court to reclaim possession of $450 million in Robinhood shares.

Emergent Fidelity Technologies, a company headquartered in Antigua and Barbuda, is the sole owner of the 56 million brokerage shares held in the portfolio. Sam Bankman-Fried (SBF), FTX’s founder and former CEO, purchased these shares in March, giving him a 7.6% interest in Robinhood.

$450M Worth Shares Disputed by Three Parties

Ownership of the shares is being disputed by three parties: crypto lender BlockFi, FTX creditor Yonathan Ben Shimon, and SBF. Now FTX is seeking the court to prevent BlockFi and others from taking over the company’s shares.

On November 28th, BlockFi claimed in a lawsuit that it had loaned FTX’s sister business, Alameda Research, $680 million, and that these shares had been pledged as security.

While BlockFi stipulated that the debt be repaid by November 9th, both Alameda and FTX filed for Chapter 11 bankruptcy protection prior to that date, thereby preventing BlockFi from collecting on the loan. After filing for bankruptcy, FTX said it would be protected from creditors.

After Emergent filed for Chapter 11 on November 11, its broker, ED&F Man Capital Markets, was ordered by the Bankruptcy Court to freeze the company’s shares. There were rumors that prior to the bankruptcy filing, SBF tried to sell the shares over the messaging app Signal.

As it works to find a method to pay back its debts, FTX has asked the court to keep the shares frozen in the meantime. The struggling firm maintains that FTX is the true owner of the shares and that Emergent simply has “nominal” ownership.

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