56 Million Of Robinhood Stock Once Used As Collateral For BlockFi Is Under Review
BlockFi is in dire straits because of a dispute over Robinhood stock that Alameda used as collateral for more than $600 million in loans.
According to the Wall Street Journal, Judge Michael Kaplan of the U.S. Bankruptcy Court in Trenton, N.J., responsible for overseeing the bankruptcy of BlockFi, has agreed to review a request made by the crypto lender, which may transfer the disputed 56 million Robinhood shares to a neutral account, but the judge has not yet made a decision. BlockFi lawyer Richard Anigian said:
“These shares should be protected right now.”
The final decision, after which a ruling will be made at a court hearing in January 2023. If BlockFi’s request is successful, the shares will be held by a brokerage or escrow account until court proceedings determine who actually owns the disputed shares.
Since early November, when FTX’s issues first surfaced, Robinhood’s stock had fallen by around 40%.
Prior to the demise of FTX, the crypto exchange Sam Bankman-Fried created an organization owned by him called Markets Inc., allegedly established as collateral to BlockFi.
FTX has asserted its own ownership rights over the Robinhood stock, which is held by an Antiguan firm backed by Bankman-Fried.
According to recent court papers by BlockFi, Emergent Fidelity Technologies Ltd. provided the Robinhood shares to BlockFi as collateral for more than $600 million in loans that BlockFi had issued to Alameda Research, the trading company associated with FTX, days before FTX filed for Chapter 11 bankruptcy in November. FTX’s U.S. management has disputed BlockFi’s assertion and asserted that Alameda is the rightful owner of the Robinhood interest.
The legal battle is the latest to crop up after FTX’s demise, which forced BlockFi, a longtime client, into Chapter 11 bankruptcy.
In his sworn affidavit in Antigua, Bankman-Fried claimed that he and FTX co-founder Gary Wang had borrowed money from Alameda earlier this year to fund a brand-new Antiguan business he controlled in order to buy a 7.6% interest in Robinhood.
Anigian claimed that BlockFi had evidence to back up its argument that it has a direct claim to the shares, citing a financing arrangement and an agreement from November 9 in which Emergent pledged the shares as collateral for its loan guarantee.
In order to reply to BlockFi’s lawsuit, liquidators chosen by an Antiguan court to wind down Emergent requested extra time. According to Matthew Ziegler, an attorney for the Antiguan liquidators, their sole objective is to safeguard Emergent’s assets and determine who ought to receive the Robinhood shares.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Website: coincu.com
Harold
Coincu News
Author
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56 Million Of Robinhood Stock Once Used As Collateral For BlockFi Is Under Review
BlockFi is in dire straits because of a dispute over Robinhood stock that Alameda used as collateral for more than $600 million in loans.
According to the Wall Street Journal, Judge Michael Kaplan of the U.S. Bankruptcy Court in Trenton, N.J., responsible for overseeing the bankruptcy of BlockFi, has agreed to review a request made by the crypto lender, which may transfer the disputed 56 million Robinhood shares to a neutral account, but the judge has not yet made a decision. BlockFi lawyer Richard Anigian said:
“These shares should be protected right now.”
The final decision, after which a ruling will be made at a court hearing in January 2023. If BlockFi’s request is successful, the shares will be held by a brokerage or escrow account until court proceedings determine who actually owns the disputed shares.
Since early November, when FTX’s issues first surfaced, Robinhood’s stock had fallen by around 40%.
Prior to the demise of FTX, the crypto exchange Sam Bankman-Fried created an organization owned by him called Markets Inc., allegedly established as collateral to BlockFi.
FTX has asserted its own ownership rights over the Robinhood stock, which is held by an Antiguan firm backed by Bankman-Fried.
According to recent court papers by BlockFi, Emergent Fidelity Technologies Ltd. provided the Robinhood shares to BlockFi as collateral for more than $600 million in loans that BlockFi had issued to Alameda Research, the trading company associated with FTX, days before FTX filed for Chapter 11 bankruptcy in November. FTX’s U.S. management has disputed BlockFi’s assertion and asserted that Alameda is the rightful owner of the Robinhood interest.
The legal battle is the latest to crop up after FTX’s demise, which forced BlockFi, a longtime client, into Chapter 11 bankruptcy.
In his sworn affidavit in Antigua, Bankman-Fried claimed that he and FTX co-founder Gary Wang had borrowed money from Alameda earlier this year to fund a brand-new Antiguan business he controlled in order to buy a 7.6% interest in Robinhood.
Anigian claimed that BlockFi had evidence to back up its argument that it has a direct claim to the shares, citing a financing arrangement and an agreement from November 9 in which Emergent pledged the shares as collateral for its loan guarantee.
In order to reply to BlockFi’s lawsuit, liquidators chosen by an Antiguan court to wind down Emergent requested extra time. According to Matthew Ziegler, an attorney for the Antiguan liquidators, their sole objective is to safeguard Emergent’s assets and determine who ought to receive the Robinhood shares.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Website: coincu.com
Harold
Coincu News
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