BlockFi sues SBF

BlockFi sues SBF over Robinhood shares

29.11.2022 11:36 (Updated 29.11.2022 11:11)
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by Yana Popenkova
2 min read

Now bankrupt crypto lender BlockFi filed a suit over Robinhood stocks bought by former FTX CEO Sam Bankman-Fried, citing it was pledged as collateral earlier in November.

The suit was filed on the same day in the same court in New Jersey on Nov. 28, when crypto lender BlockFi filed for Chapter 11 bankruptcy. Allegedly, Sam Bankman-Fried’s firm Emergent Fidelity Technologies has failed to pay the previously agreed collateral to BlockFi on Nov. 9. Thus, BlockFi is stating a violation of the payment schedule.

Emergent Fidelity Technologies bought 7.6% shares of Robinhood in May this year, a total of 648M in dollar terms.

BlockFi’s decision to take back the funds is directly derived from the company’s reported financial standing in the bankruptcy file. According to the file, BlockFi has between $1B and $10B in assets, the same amount in liabilities, and more than 100.000 creditors.

The company previously shared preliminary information about exposure to FTX, citing that the amount is “significant.” In the BlockFi Update form Nov. 14, the company stated:

“The rumors that a majority of BlockFi assets are custodied at FTX are false. That said, we do have significant exposure to FTX and associated corporate entities that encompasses obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX.US.”

BlockFi never revealed the actual extent of exposure.

Related: Crypto Digest from Tradecrypto.com #179

In June this year, BlockFi signed a term with FTX to secure a $250M credit line from FTX. A week before BlockFi cut 20% of its staff to survive the crypto firms contagion, it started with Terra LUNA collapse.

Related: BlockFi Looking to Further Trim Down Its Staff

The firm stayed afloat for a time, but due to the collapse of the FTX, it couldn’t hold out.

Sam Bankman-Fried and Emergent Fidelity Technologies didn’t immediately comment on BlockFi filing a suit over Robinhood shares.

Author

  • Previously worked in the arts, now specializes in covering crypto with an emphasis on DeFi, blockchain and mass adoption. Offers simple and clear writing, always looking for new ways to present information. Major in International Relations, minor in English, in a spare time reads postmodern literature, does yoga and watches movies.

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