Bankrupt cryptocurrency lender BlockFi is suing FTX’s Bankman-Fried’s investment company Emergent Fidelity Technologies to turn over its $575M stake in Robinhood as collateral it agreed to pay.
Sam Bankman-holding Fried’s firm has been sued by now bankrupt cryptocurrency lending business BlockFi for the shares of Robinhood that Bankman-Fried promised as collateral earlier this month.
Just a few hours after BlockFi filed for Chapter 11 bankruptcy in the same court on November 27, the lawsuit was filed there on November 28.
According to the petition, BlockFi is requesting turnover collateral from Emergent as part of a pledge agreement from November 9 in which Emergent agreed to a payment schedule with BlockFi that it is believed has not been met.
The collateral is described by BlockFi as “containing some shares of common stock.”
Through his Emergent investment business, Bankman-Fried spent $648 million purchasing 7.6% of the shares of the online brokerage company Robinhood.
One of the most recent businesses to declare bankruptcy as a consequence of the demise of the FTX cryptocurrency exchange is BlockFi.
Earlier in the month, the cryptocurrency company first disputed that the bulk of its assets was kept on FTX, but it later confirmed having “substantial exposure” to the exchange.
BlockFi claimed that the company had assets between $1 billion and $10 billion, liabilities in the same range, and more than 100,000 creditors in its bankruptcy case.
Prior to FTX declaring bankruptcy on November 11, Bankman-Fried had been scrambling to get new finance worth billions of dollars. His Robinhood shares were mentioned as an asset in spreadsheets he provided to investors.
Even after signing the commitment agreement, Bankman-Fried was still in talks to sell his Robinhood shares, according to two persons with knowledge of the situation.
On the evening of November 10, Bankman-Fried was still negotiating such deals, according to reports.
