BlockFi sues former FTX CEO over Robinhood shares


Summary:

  • The crypto lender filed a complaint in New Jersey regarding Sam Bankman-Fried’s Robinhood shares.
  • SBF pledged his Robinhood shares to BlockFi as part of an agreement on November 9, the lender filed this week hours after declaring chapter 11 bankruptcy.
  • Bankman-Fried’s 7.6% stake in Robinhood was purchased in May for $600 million.

Bankrupt crypto lender BlockFi submitted a lawsuit against FTX founder Sam Bankman-Fried hours after filing for chapter 11 bankruptcy.

SBF pledged Robinhood shares to BlockFi

The petition submitted to a New Jersey court argued that SBF signed over his stake in Robinhood as part of a deal agreed on November 9, Financial Times reported.  According to the crypto lender, the agreement was supposedly reached before FTX filed for bankruptcy in Delaware on November 15.

The shares in question were scooped up by Bankman-Fried in May for a whopping $600 million. SBF emerged with a 7.6% in the stock trading giant after splurging the big bucks at the time. 

BlockFi claimed that SBF tapped London-based ED&F Man as a broker for the Robinhood deal. The British firm had “custody of the collateral that belongs to BlockFi”, Tuesday’s lawsuit explained. 

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Emergent Fidelity Technologies, a company tied to Bankman-Fried, was also mentioned as a player in the deal to secure Robinhood shares. 

Moving forward, the lender plans to recover the shares worth nearly a billion dollars and “enforce the terms of a pledge agreement and to recover collateral that is property of these bankruptcy estates”.

BlockFi bankruptcy after FTX exposure 

The lender submitted the complaint shortly after filing for chapter 11 bankruptcy, EthereumWorldNews reported. Monday’s filing revealed that over 100,000 creditors had claims to the firm’s remaining assets made up of around $256 million in cash plus $1 billion and $10 billion in assets and liabilities.

Ankura Trust Company LLC and the U.S. Securities and Exchange Commission (SEC) were the biggest creditors, per the filing. Contagion from FTX’s collapse continued to shell out reverberations through the cryptocurrency industry at press time. 

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