- Bankrupt new FTX bosses are trying to wrest control of Robinhood stock from Sam Bankman-Fried.
- Valued at $450 million, the 56 million shares represent a 7.6% stake in trading app company Robinhood.
- Failed crypto lender BlockFi and an Antigua-based FTX creditor have also filed an equity claim in court.
Disgraced FTX founder Sam Bankman-Fried and new cryptocurrency exchange heads are locked in a legal battle over who owns a stake in Robinhood worth just under $450 million, a court report Thursday showed.
Both claim assets owned by the Antigua-based holding company Emergent Fidelity Technologies – whose sole director and largest stakeholder was Bankman-Fried.
Emergent and Bankman-Fried disclosed a 7.6% stake in trading app provider Robinhood in May. The then-crypto billionaire paid $648 million for just over 56.3 million shares, according to an SEC filing.
Robinhood shares were trading at $7.99 as of Thursday’s closing bell, which means Emergent’s stake is now worth $447 million.
On Thursday, FTX’s new bosses filed a motion in US Bankruptcy Court asking it to freeze any activity in the shares during a four-way dispute over who owns them.
Lawyers for the collapsed cryptocurrency exchange, which is trying to track down funds to pay creditors, told a Delaware court that it believes the Robinhood stake owned by Emergent is FTX’s property, not Bankman-Fried’s.
“The debtors are conducting an investigation into the business affairs of the FTX Group,” they said in the application. “This investigation so far indicates that Robinhood shares are the property of Debtor’s Estate, which is only nominally owned by Emergent.”
Two others claimed Robinhood shares: failed cryptocurrency lending firm BlockFi and FTX creditor Yonatan Ben Shimon.
BlockFi sued Bankman-Fried over Robinhood shares in November, saying Alameda Research’s $1 billion pledge to secure loan commitments included the stake. The move was made, said Carolyn Ellison, who was the head of FTX’s trading arm at the time.
“Robinhood shares were included in these collateralized assets by Alameda’s then-CEO, despite the fact that Robinhood shares were nominally owned by Emergent, because Alameda had and still has an ownership interest in Robinhood shares,” FTX said. Court file.
The company has asked a bankruptcy judge to prevent BlockFi from suing Robinhood.
Robinhood CEO Vlad Tenev said he expects the emerging stake in bankruptcy proceedings to be booked for a long time, given the asset hunt on the failed exchange.
“I’m not surprised that it’s one of the most valuable assets they have on their balance sheet, because it’s a public company stock,” Tenev told CNBC’s “Squawk Box” earlier in December.
He added, “We’re just watching this unfold. And it’s going to be locked up in bankruptcy proceedings – probably for some time – and so we’re kind of seeing how that plays out.”
Bankman-Fried, who faces criminal charges including fraud in the United States, was released on $250 million bail after a hearing in a New York court on Thursday. Ellison and FTX co-founder Gary Wang have pleaded guilty to federal criminal charges of fraud.
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