The largely disputed Robinhood shares might be transferred to a neutral broker or an escrow account while the courts determine the rightful owner.
Digital asset lender BlockFi recently sued former FTX CEO Sam Bankman-Fried to claim the shares that were supposedly pledged as collateral for the more than $600 million that BlockFi loaned to Alameda Research.
The 56 million Robinhood Markets shares, which are currently frozen, are worth around $450 million. These are owned by Sam Bankman-Fried’s holding company called Emergent Fidelity Technologies which was formed in Antigua and Barbuda and held by a brokerage company called Marex Capital Markets. According to a lawyer from the brokerage firm, the company would continue to hold the shares until a court order is issued.
In a new update to the dispute, bankruptcy Judge Michael Kaplan has reportedly stated that on Jan. 9, he would review whether the shares should be transferred to a neutral broker, which is under the jurisdiction of the United States, following a request from BlockFi. Kaplan noted that he would be considering questions on who owns the shares after the lawyers have more time to analyze competing claims.
Related: Bankruptcy court told FTX and Alameda they owe BlockFi $1B, but it’s complicated
On Dec. 23, FTX asked the court to stop BlockFi from claiming the Robinhood shares. The company argued that by keeping the shares where they are, the claimants which include BlockFi, Bankman-Fried and FTX creditor Yonathan Ben Shimon can “participate in an orderly claims process.” If not approved, FTX requested an extension of the assets’ “stay” on their side of the fence.
Meanwhile, an affidavit filed by the former FTX CEO revealed that he borrowed $546M from Alameda to purchase the highly sought-after Robinhood shares. The funds were lent by Alameda Research to both Bankman-Fried and FTX co-founder Gary Wang to make the purchase.