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BlockFi Sues SBF Over Robinhood Shares After Filing for Bankruptcy: Report

Shortly after filing for Chapter 11 bankruptcy protection, the distressed crypto lender has gone after Sam Bankman-Fried’s Emergent Fidelity Technologies entity.

BlockFi’s filing involves shares of Robinhood that the once-FTX boss purchased earlier this year.

  • The US-based crypto lender filed for bankruptcy yesterday in a New Jersey court, as reported, but also launched a lawsuit against SBF in the same court, according to documents seen by the FT.
  • BlockFi put the blame for its bankruptcy on its exposure to FTX and Alameda, saying the latter had defaulted on a $680 million collateralized loan in early November, just as SBF’s empire was starting to implode.
  • The crypto lender said it entered into an agreement with Emergent on November 9 to “guarantee the payment obligations of an unnamed borrower by pledging certain “common stock” as security.” This borrower turned out to be Alameda and the stock in question – Robinhood’s HOOD.
  • Recall that Bankman-Fried purchased a 7.6% stake in Vlad Tenev’s company earlier this year after refuting rumors that he plans to buy out the entire trading firm.
  • Just ahead of FTX’s bankruptcy filing, reports emerged that SBF was trying to dispose of his Robinhood share privately using the Signal app. According to the FT, he continued negotiating the terms of a potential sale even after pledging the agreement with BlockFi.
  • The most recent lawsuit by BlockFi also named ED&F Man Capital Markets as Emergent’s broker that actually refused to transfer the collateral to the crypto lender.

The post BlockFi Sues SBF Over Robinhood Shares After Filing for Bankruptcy: Report appeared first on CryptoPotato.