FTX Asks Judge for Help in Fight Over Robinhood Shares Worth About $450M

Three parties, including ex-FTX CEO Sam Bankman-Fried, have tried to get control over the 56 million shares.

AccessTimeIconDec 22, 2022 at 11:18 p.m. UTC
Updated May 9, 2023 at 4:05 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

FTX sought a U.S. bankruptcy court's help amid a battle over ownership of about $450 million worth of stock in Robinhood Markets (HOOD), according to a filing Thursday.

At issue are about 56 million shares of the brokerage owned by Emergent Fidelity Technologies Ltd., a corporate entity organized in Antigua and Barbuda and 90% controlled by former FTX CEO Sam Bankman-Fried, according to the filing.

Three parties, the filing says, have tried to get control of those shares: BlockFi (a lender that FTX had helped prop up earlier this year), Yonathan Ben Shimon (an FTX creditor appointed as a receiver in Antigua and granted permission to sell the shares under supervision of a court there) and Bankman-Fried himself (who has legal bills).

FTX's bankruptcy estate told ED&F Man Capital Markets, the brokerage where the shares are parked, to freeze the stock around the time the Chapter 11 case began on Nov. 11. FTX has determined that Emergent only "nominally" owns the shares and that they truly belong to FTX. "Emergent is a special-purpose holding company that appears to have no other business," the crypto exchange said in the filing.

The judge overseeing the bankruptcy case should force the shares to remain frozen while FTX tries to figure out how to repay all its creditors, FTX argued in the filing.

"The fact that multiple prepetition creditors of different Debtors and Mr. Bankman-Fried are all seeking to obtain possession of the Robinhood Shares demonstrates that the asset should be frozen until this Court can resolve the issues in a manner that is fair to all creditors of the Debtors," FTX said.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Nick Baker

Nick Baker is CoinDesk’s deputy editor-in-chief and a Loeb Award winner. His crypto holdings are below CoinDesk's $1,000 disclosure threshold.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.