FTX Urges Chapter Court docket to Freeze $450M in Robinhood Shares Owed to Collectors

 FTX Urges Chapter Court docket to Freeze $450M in Robinhood Shares Owed to Collectors

FTX, now within the palms of its new CEO John J. Ray III, is urging the chapter courtroom overseeing the change’s unwinding to freeze roughly $450 million in Robinhood shares.

In a courtroom submitting, FTX argued that as a result of there are such a lot of collectors in search of possession over these shares, “the asset needs to be frozen till this Court docket can resolve the problems in a way that’s truthful to all collectors of the Debtors.”

The 56 million shares in Robinhood Class A standard inventory are at present held in a brokerage account in New York Metropolis referred to as ED&F Man Capital Markets Inc. Sam Bankman-Fried bought these shares in Might this yr through a special-purpose holding firm organized in Antigua and Barbuda referred to as Emergent Constancy Applied sciences.

The founding father of FTX and its former CEO is likely one of the collectors hoping to pay money for the stockpile to pay for his intensive authorized charges. BlockFi, the now-bankrupt crypto lender that was initially promised these shares, is one other creditor, as is Yonathan Ben Shimon, who petitioned an Antigua-based courtroom to nominate him the Robinhood shares.

BlockFi filed a lawsuit in opposition to Bankman-Fried shortly after asserting its chapter in November, indicating that these Robinhood shares had been promised as collateral. The grievance from that point alleges that Emergent Constancy Applied sciences “has custody of the collateral that belongs to BlockFi.”

Although the newest submitting claims that these shares truly belong to the chapter property, it argues as an alternative that as a consequence of this checklist of collectors, the courtroom ought to maintain off on any distribution of those shares.

“The Court docket want discover solely that the Robinhood Shares are ‘arguably’ property property, which requires a discovering that Alameda has ‘controversial claims of proper to the [Robinhood Shares], or a colorable foundation for asserting an curiosity within the [Robinhood Shares].’”

This “colorable” declare, the submitting argues, is sufficient that the $450 million in Robinhood shares ought to “stay frozen.”

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