Sam Bankman-Fried wants to retain his Robinhood shares worth $450 million to pay for his criminal defense. The lawyers of disgraced FTX co-founder Sam Bankman-Fried have filed an objection to protect their client’s Robinhood shares from FTX bankruptcy estate.
What SBF’s Lawyers claimed?
Sam Bankman-Fried’s lawyers claimed his Robinhood shares are regulated by Emergent Fidelity Technologies, which is not part of the estate. Founder of defunct crypto exchange FTX, Sam Bankman-Fried has filed a motion pursuing to block FTX debtors from taking control of his 56 million Robinhood shares. Earlier, US prosecutors notified to seize those Robinhood shares worth $450 million. FTX co-founder SBF, who is currently under house arrest, has argued in a court filing that Robinhood shares do not belong to any of the FTX-related entities.
Bankman-Fried, aka SBF, owns the Robinhood shares through his 90% stake in Emergent, which disclosed the equity acquisition in a distinct filing with the U.S. Securities and Exchange Commission (SEC). Bankman-Fried reportedly borrowed money from Alameda to fund the stock acquisition. According to FTX lawyers, FTX debtors can only seize the shares by proving that Alameda fraudulently gave them to Emergent.
Why Robinhood shares are essential?
Sam Bankman-Fried wants to retain his Robinhood shares worth $450 million to pay for his criminal defense. “Mr. Bankman-Fried requires some of these funds to pay for his criminal defense,” the filing read, noting that the disgraced FTX founder is “facing potential criminal liability.” Bankman-Fried pleaded not guilty to all charges, including wire fraud and campaign finance violations, in New York Tuesday.
Bankman-Fried’s move is the latest in an ongoing ownership dispute over the shares. The equities, once worth more than $600 million, have plunged since they’ve been stuck in legal limbo. More than 56 million Robinhood shares are on the line, worth a little more than $450 million as of Friday’s prices, Thursday’s court filing revealed. The shares belong to Emergent Fidelity Technologies, of which Bankman-Fried is the 90% stockholder, the filing added.
FTX investors and customers seek claim on Robinhood shares BlockFi, a crypto lending firm that FTX promised to bail out with a $250 million agreement, filed for bankruptcy. BlockFi had massive exposure to the failed crypto exchange. The crypto leading firm sought claims on SBF’s Robinhood shares in its bankruptcy filing. Earlier, FTX customers also filed a class action lawsuit against the exchange and SBF, alleging they deserve all the assets that are left with FTX. In its bankruptcy filing, FTX had revealed that it has over 1 million creditors.
