Disputed Robinhood shares may be moved to neutral account at BlockFi’s request
The judge overseeing the ongoing BlockFi bankruptcy lawsuit will today consider a request that could move 56 million shares of Robinhood stock to a neutral location, The Wall Street Journal reports. Agreed. December 28th.
The judge has yet to agree to move the assets to the neutral account. The issue is scheduled to be decided at a court hearing next month.
If BlockFi’s request is successful, the shares will be held in a broker or escrow account until legal proceedings determine the actual owners of the shares at issue.
BlockFi believes it should own Robinhood shares because of its previous deals with FTX and Alameda Research. Just before FTX collapsed in November, Alameda pledged shares to BlockFi as loan collateral. BlockFi has attempted to acquire and sell shares since bankruptcy proceedings began on November 28.
But BlockFi is just one entity fighting over ownership of Robinhood shares, and the proceedings are taking place in multiple jurisdictions. This means that conflicts may not be resolved in an easy way.
Last week, FTX and Alameda Research took steps to secure ownership of their shares. Additionally, FTX CEO Sam Bankman-Fried and his investor Yonathan Ben Shimon each seek to control the stock on a personal level.
The disputed shares are now owned by Emergent Fidelity Technologies, a holding company 90% owned by Bankman-Fried. The company originally bought shares in his May on behalf of Bankman-Fried. At the time, the stock was worth $482 million.
