BlockFi Sues Sam Bankman-Fried Regarding Robinhood Shares

Twitter icon  •  Published 2개월 전  •  Mark Weaden

A recent report claims that SBF tried to sell his HOOD shares even after pledging an agreement with BlockFi

The fall of FTX and one of the biggest names in the industry, Sam Bankman-Fried (SBF), caught us all by surprise, with the fallout of the collapse only now coming to the surface. A recent report claims that SBF tried to sell his HOOD shares even after pledging an agreement with BlockFi.

The Collapse Of FTX and Bankman-Fried

Shortly after SBF filed for Chapter 11, the cryptocurrency lending platform BlockFi reported looked to sue Emergency Fidelity Technologies, a company belonging to the former FTX CEO and co-founder. The case against the underfire Bankman-Fried is held up for how he handled shares investing in the Robinhood trading app.

A report by the Financial Times (FT) on Monday cited loan documents that show Robinhood shares held by the company pledged to use BlockFi as collateral. The news came as BlockFi filed for bankruptcy protection on the same day. 

Since the FTX fiasco, the industry, especially exchanges and crypto lending firms, has been under great pressure, with shareholders and domestic investors pulling funds from these platforms. The sheer scale of a company like FTX, previously valued at $32 billion, falling apart has been detrimental to the industry as a whole, with the industry’s gold standard, Bitcoin (BTC), falling to around $16,000 from a $20,000, where it had been hovering for some time. 

A combination of poor management and gross negligence with how FTX was being run were the catalysts for the company’s downfall. Ongoing investigations will show exactly what happened, but those managing FTX and its associated companies are trying to get funds to customers and shareholders. 

Bankman-Fried Acting Irresponsibly

In an attempt to raise money before the collapse of his exchange, SBF was looking to sell his Robinhood shares. The FT report claims BlockFi and Emergent Fidelity Technologies entered an agreement on November 9th to guarantee payment by an unnamed borrower and offer unnamed stock as collateral—with SBF’s Alameda Research reported as the borrower. 

BlockFi was valued at around $4.8 billion when the bankruptcy filing was made, with some 100,000 creditors, liabilities, and assets running from $1-10 billion. The crypto lending firm also listed an outstanding $275 million loan to FTX US.

BlockFi had this to say on the issue “We do have significant exposure to FTX and associated corporate entities that encompass obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX.US,” 

Author

Mark Weaden

Mark Weaden is a British researcher and crypto enthusiast, living in Barcelona. His work has been published on a variety of leading cryptocurrency sites.

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