Sam Bankman-Fried is being sued by bankrupt bitcoin lender BlockFi for shares in Robinhood that the former FTX CEO reportedly pledged as collateral earlier this month.
According to Financial Times, Sam Bankman-Fried has been sued by BlockFi over his ownership of Robinhood. The report was released right after BlockFi filed for chapter 11 bankruptcy protection a few hours ago. BlockFi’s complaint seeks Robinhood’s shares because SBF allegedly maintained them as collateral.
It should be made known that, Robinhood, which was purchased in May of this year, has 7.6% of the stock owned by the founder of FTX. The shares purchased by SBF’s Emergent Technologies were then valued at around $648 million. Additionally, it is claimed that Bankman-Fried was the only director that held the majority of the shares. The plans for the acquisition of Robinhood came after the thereof action, but it did not carry out eventually.
At the moment, the firm stated that it would be recovering all the obligations owed to BlockFi as part of its restructuring efforts. However, the process of recovery from FTX will be delayed due to the bankruptcy proceedings of the crypto exchange.
With the collapse of FTX, the BlockFi management team and board of directors immediately took action to protect clients and the Company
said Mark Renzi of Berkeley Research Group, the Company’s financial advisor.
In order to maintain its operation, BlockFi also filed for customary motions which are making crucial employee retention plans, paying wages, and keeping benefits for employees. However, the New Jersey court has not yet approved these motions.
Along with Three Arrows Capital, Voyager, Celsius, and FTX, BlockFi is the latest name to join the collapsed list of cryptocurrency businesses that failed during the crypto winter and were forced to file for Chapter 11 bankruptcy protection in 2022. The company made the filing days after it suspended withdrawals because of FTX’s collapse.
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