Sam Bankman-cryptocurrency Fried’s trading firm Alameda Research is embroiled in a dispute with Robinhood Markets over more than $440 million in shares. FTX Group has asked an American bankruptcy judge to step in and resolve the dispute.
BlockFi, a crypto lender, and a single FTX creditor have each attempted to acquire the shares through separate legal actions in New Jersey and Antigua, according to FTX attorneys’ court documents filed on Thursday. In order to satisfy debts, both parties assert that they are entitled to the stock, or 56 million shares in total.
According to FTX lawyers, Bankman-Fried attempted to seize control of the shares on December 11 before being arrested on fraud-related charges. He filed a court petition in Antigua requesting control over the company that holds the stock, but the matter is still pending. According to FTX, Bankman-Fried may be attempting to gain control of the shares to use them to pay his legal expenses.
This week, Bankman-Fried was extradited from the Bahamas to the US to stand trial for fraud. On Thursday, he appeared in a US court for the first time and was granted a $250 million bail.
In the US, parties who are owed money by bankrupt companies are typically prohibited from attempting to seize assets in order to pay their debts. The ownership of the Robinhood shares, however, is unclear because they are held in the name of an Antiguan corporation that is 90% owned by Bankman-Fried.
Attorneys for FTX requested that the access to the shares be frozen while the true owner of the securities was being ascertained from the bankruptcy judge presiding over its insolvency case. According to the attorneys, FTX likely owns the shares.
In the period leading up to FTX’s collapse, the Robinhood shares were very important. In an effort to raise rescue financing, they were listed in a spreadsheet as some of the most valuable, liquid assets of the crypto empire.
BlockFi, which is insolvent itself, did not mention Alameda or FTX in its filing last month, but sought to recover the shares from the Antiguan entity. Former Alameda CEO Caroline Ellison reportedly pledged the shares to BlockFi just prior to FTX’s demise, according to FTX lawyers.
An email asking for comment received no immediate response from BlockFi representatives.
FTX Trading Ltd., 22-11068, U.S. Bankruptcy Court for the District of Delaware, is the name of the bankruptcy case.