FTX Wants SBF’s $450M Robinhood Stake Frozen After BlockFi Sues

BlockFi wants to collect on a 7.6% stake in Robinhood, collateral pledged by Alameda in the early days of FTX’s collapse

article-image

OpturaDesign/Shutterstock, modified by Blockworks

share

FTX has asked a US court to freeze $450 million in Robinhood shares following a competing claim from embattled crypto lender BlockFi.

BlockFi declared bankruptcy and sued a Sam Bankman-Fried holding company over his Robinhood stock last month. The firm says Alameda had pledged the stake in November as part of a billion-dollar collateral package intended to back loans worth $680 million.

Both FTX and Alameda were beginning to unravel at the time, leading the lender to seek additional security. BlockFi now wants to collect the 56 million shares, which have reduced in value some 40% since it was pledged.

BlockFi owes an estimated 100,000 creditors up to $10 billion; its critical FTX bailout from June snuffed by the fraud scandal.

But at this point, it’s not exactly clear who really owns the stock. Bankman-Fried himself is staking a claim, as is an FTX creditor, per a Thursday motion filed in US bankruptcy court in Delaware. 

In May, Bankman-Fried disclosed he held a 7.6% stake in Robinhood, at the time worth $605 million, through a firm Emergent Fidelity Technologies, of which he is a majority owner. The company is incorporated in Antigua & Barbuda.

The former FTX CEO had been looking for a source of payment for legal fees, according to the motion.

“Emergent is a special-purpose holding company that appears to have no other business,” FTX said in its filing. The firm, now run under veteran insolvency specialist John Ray, reckons the Robinhood shares will be conclusively estate property once its evidence has been finalized.

As such, FTX wants an automatic stay on the stock in a manner fair to creditors until its formally solved, filing a Thursday motion in the US bankruptcy court in Delaware.

If courts don’t determine the FTX estate owns the stock, then it should extend the stay to Emergent itself and “ensure that all creditors — including BlockFi and the others — can participate in an orderly claims process before this Court.”

The filing calls out ex-Alameda CEO Caroline Ellison for pledging the collateral package despite the shares being technically owned by Emergent, allegedly with “knowledge and encouragement from Bankman-Fried.”

A hearing on the matter had not been scheduled at the time the motion was filed.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Unlocked by Template.png

Research

With the spot ETH ETF approval, the institutions are coming. stETH - given its dominance in marketshare, existing liquid market structures, and highly desirable properties - is poised for institutions.

article-image

Launching cryptocurrencies the old fashioned way may soon make a return

article-image

Kraken and CertiK brought their beef to social media after Kraken said researchers exploited $3 million through a bug

article-image

NVIDIA’s historic run is only deepening the divide between mega-cap tech stocks and the rest of the market.

article-image

EIP-7702 was quickly adopted for the next Ethereum upgrade, but developers haven’t quite locked it down