FTX vs BlockFi: Court to send Robinhood shares into escrow account 

The hotly contested Robinhood shares that BlockFi and FTX both claimed ownership of might be moved to a neutral broker or an escrow account until the courts decide who the true owner is.

Digital asset lender BlockFi recently filed a lawsuit against former FTX CEO Sam Bankman-Fried to recover the shares that were allegedly pledged as security for the more than $600 million that BlockFi lent to Alameda Research.

Approximately $450 million is the value of the 56 million frozen Robinhood Markets shares. They are owned by Bankman-Fried holding firm Emergent Fidelity Technologies, which was established in Antigua and Barbuda and is controlled by brokerage firm Marex Capital Markets. The corporation will hold onto the shares until a court order is issued, according to a lawyer from the brokerage firm.

After receiving a request from BlockFi, the presiding judge, Michael Kaplan announced that he will review the issue on January 9, 2023, and determine whether the shares should be transferred to a neutral broker subject to US law. After the lawyers have had more time to evaluate opposing claims, Kaplan stated that he will be thinking about the question of who owns the shares.

On December 23, FTX requested a court order prohibiting BlockFi from obtaining the Robinhood shares. BlockFi, Bankman-Fried, and FTX creditor Yonathan Ben Shimon are among the claimants. The company argued that by keeping the shares in place, the claimants can “participate in an orderly claims process.” If not granted, FTX demanded that the assets “remain” longer on their side of the fence. 

According to an affidavit submitted by the former FTX CEO, he borrowed $546 million from Alameda to buy the highly-prized Robinhood shares. Alameda Research lent Bankman-Fried and FTX co-founder Gary Wang the money to execute the transaction.

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