News

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

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.

Recent Posts

Bitcoin Spot ETF Inflows Reach $449M With BlackRock Leading

Key Points: Bitcoin Spot ETF Inflows totaled $449M, led by BlackRock’s $1.45B contribution. Ethereum Spot…

25 minutes ago

Best New Meme Coins to Join for 2025: BTFD Coin Leads, Popcat Keeps It Purr-fect, and Non-Playable Coin Hits Gamers Hard

Discover the Best New Meme Coins to Join for 2025. BTFD Coin's price rollback offers…

2 hours ago

Solana memecoins crash while DTX Exchange hits 100,000 TPS on layer-1 blockchain

Discover how DTX Exchange's historic achievement of 100,000 transactions per second on a layer-1 blockchain…

2 hours ago

Strategic Bitcoin Reserve Expected to Cut 35% of US National Debt by 2049

VanEck suggests the U.S. could reduce its national debt by 35% by 2050 through a…

3 hours ago

The New Lead of Presidential Crypto Council Appointed by Trump Is Bo Hines

President-elect Donald Trump named Bo Hines as the executive director of the presidential crypto council.

3 hours ago

Best New Meme Coins with 1000X Potential: BTFD Coin’s Hot BIG50 Discount As Baby Doge Coin, Dogs Takes Gaming to the Next Level

Explore the best new meme coins with 1000X potential. Learn how BTFD Coin leads with…

4 hours ago

This website uses cookies.