FTX Seeks Court Help in Retaining Ownership of Robinhood Shares

In order to seize ownership of Robinhood shares worth $450 million, Sam Bankman Fried’s insolvent crypto exchange FTX is requesting assistance from a US bankruptcy court.

An entity with its corporate offices in Antigua and Barbuda, Emergent Fidelity Technologies, has 56 million brokerage shares that are included in the portfolio. 

Sam Bankman-Fried, the founder of the exchange had already purchased these shares in March, amounting to a 7.6% ownership holding in Robinhood (SBF).

BlockFi, a cryptocurrency lender, Yonathan Ben Shimon, a creditor of FTX, and SBF are the three participants challenging possession of the shares with FTX seeking the court to halt the takeover of the shares by BlockFi and other parties.

BlockFi Filed Lawsuit Against FTX

Notably, BlockFi, a cryptocurrency lender, filed a lawsuit against SBF’s Emergent Fidelity Technologies holding company on November 28, the same day that the company filed for Chapter 11 bankruptcy protection, for shares of Robinhood Markets (HOOD) that the company owned. 

BlockFi had specified that the loan repayment was due on November 9. However, Alameda and FTX declared bankruptcy before this deadline without making the loan payment. According to FTX, filing for bankruptcy protects the company from debt collection activities.

Following the Chapter 11 filing on November 11th, the shares were frozen by Emergent’s broker, ED&F Man Capital Markets, under the Bankruptcy Court’s directive. 

FTX is pleading with the court to permit the shares to stay frozen while it looks for ways to pay its creditors. As TheCoinRise reported, FTX was revealed to have a debt of nearly $3 billion to its top 50 creditors. 

The embattled company asserts that FTX itself is the rightful owner of the shares and that Emergent simply “nominally” holds them. Additionally, according to the exchange, Emergent is a “special-purpose holding company that appears to have no other business.”