FTX Group asked an American bankruptcy judge to intervene in a multinational fight over more than $440 million of Robinhood Markets Inc. shares tied to Alameda Research, Sam Bankman-Fried’s crypto trading house.
(Bloomberg) — FTX Group asked an American bankruptcy judge to intervene in a multinational fight over more than $440 million of Robinhood Markets Inc.
shares tied to Alameda Research, Sam Bankman-Fried’s crypto trading house.
Crypto lender BlockFi Inc. and an individual FTX creditor have tried to get their hands on the shares via separate court proceedings in New Jersey and Antigua, FTX lawyers said in court papers Thursday.
Both parties claim they’re entitled to the stock — some 56 million shares in total — in order to recover on debts.
Bankman-Fried himself tried to take control of the shares on Dec. 11, shortly before his arrest on fraud charges, according to FTX lawyers.
He petitioned a court in Antigua for control of the entity that holds the stock, but the request remains pending. Bankman-Fried may be trying to get control of the shares to help pay his legal bills, FTX said.
Bankman-Fried was extradited from the Bahamas this week to face fraud charges in the US.
He made his first US court appearance Thursday and was released on $250 million bail.
Read more: Bankman-Fried Released on $250 Million Bond in FTX Fraud Case
Parties owed money by bankrupt companies in the US are typically barred from trying to seize assets to satisfy their debts.
The Robinhood shares, though, are held in the name of an Antiguan company 90% owned by Bankman-Fried, and it’s not entirely clear whether FTX owns them.
FTX lawyers asked the bankruptcy judge overseeing its insolvency case to freeze access to the shares while their true ownership is determined.
FTX probably owns the shares, the lawyers say.
The Robinhood shares played a prominent role in the run-up to FTX’s implosion. They were touted in a spreadsheet as being some of the crypto empire’s most valuable, liquid assets amid efforts to drum up rescue financing.
BlockFi, which itself is bankrupt, filed a lawsuit in insolvency court last month seeking to recover the shares from the Antiguan entity, but did not mention Alameda or FTX in the filing.
FTX lawyers say former Alameda Chief Executive Officer Caroline Ellison pledged the shares to BlockFi just before FTX’s collapse.
Representatives for BlockFi didn’t immediately respond to an email seeking comment.
The bankruptcy case is FTX Trading Ltd., 22-11068, U.S.
Bankruptcy Court for the District of Delaware.
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