SBF and Co. Appeal For Control Over 56M Robinhood Shares

Lavina Daryanani

Parties associated with FTX have been making new filings almost every day. Via the latest one made on Thursday, FTX asked a US bankruptcy judge to stop crypto lender BlockFi from getting its hands on Robinhood shares.

FTX lawyers revealed in the court papers that BlockFi and an individual FTX creditor filed for separate court proceedings in New Jersey and Antigua laying claim on the 56 million shares worth $440-$450 million.

At press time, three parties are trying to get control of those shares. One, BlockFi—the lender that dodged bankruptcy earlier this year when FTX was solvent. Post FTX’s collapse, however, even BlockFi followed suit. Two, Yonathan Ben Shimon—an FTX creditor designated as a receiver in Antigua. He has the authority to sell the shares under the supervision of a court in Antigua. Three, Sam Bankman-Fried. In the filing, FTX said that SBF looked to claim the shares as “a source of payment for legal expenses.”

SBF was released on a $250 million bail following a hearing a few hours back. The FTX founder was extradited to the United States this week post an eight-day stay in The Bahamas Fox Hill correctional facility. The exchange’s founder has also agreed to remain under house arrest in his parents’ house.

FTX Asks Court To Freeze Robinhood Shares

The 56 million shares of the brokerage are owned by Emergent Fidelity Technologies Ltd., per the filing. And, 90% are controlled by Sam Bankman-Fried. The filing noted,

“Emergent is a special-purpose holding company that appears to have no other business.”

Meanwhile, FTX lawyers have asked the bankruptcy judge overseeing its insolvency case to freeze access to the shares their true ownership is decided and it figures out how to repay all its creditors. Lawyers argued in the filing,

“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.”