On Saturday, multiple news outlets published that the defunct cryptocurrency exchange FTX has asked (1) a court in the United States for aid in resolving a dispute regarding ownership over roughly $ 450 million worth of shares in Robinhood Markets.
Per the court document submitted by FTX, which is domiciled in the Bahamas, the 56 million Robinhood Markets stocks at the center of this disagreement have been claimed by owned by three different parties as of today.
The lawyers for the defunct cryptocurrency exchange asked the bankruptcy judge overseeing the company's insolvency case to halt the transfer to the assets awaiting verification of the possession of the shares by their rightful owners.
Attorneys feel FTX most likely owns them, even though it is unclear whether or not the company does.
According to the filing (2), the shares were purchased by Emergent Fidelity Technologies, a company majority-owned by Sam Bankman-Fried, who previously served as CEO of FTX.
Several Firms Claiming Ownership in Robinhood
BlockFi, a defunct cryptocurrency lending platform, is yet another potential claimant. To reclaim its shares, BlockFi initiated legal action against Emergent last month.
Alameda Research is a cryptocurrency trading company established in September 2017 by Bankman-Fried and Tara Mac Aulay.
According to the legal counsel for FTX, the former chief executive officer of Alameda, Caroline Ellison, committed the company's shares to BlockFi before the exchange's failure.
Yonathan Ben Shimon is the third individual vying for ownership of the shares held by Robinhood.
A creditor of FTX, designated as a receiver by the court in Antigua, has been permitted to sell the company's shares to satisfy the court's order.
According to the filing,
"The fact that multiple prepetition creditors of different debtors and Mr. Bankman-Fried are all seeking to lay claim on the Robinhood Shares demonstrates that the asset should be frozen until this court can resolve the issues."
Bankman-Fried Walks Free After Receiving a $250 Million Bail
This week, Bankman-Fried got deported from the Bahamas, where he was held in custody for eight days, to the United States, where he will be prosecuted for fraud and other criminal offenses.
His first court hearing in the United States took place on Thursday. He was freed on posting a bond of $250 million.
Ellison and Gary Wang, also a co-founder of FTX, pleaded guilty to criminal fraud charges. Both men were senior sidekicks of Bankman-Fried. The two were allowed to go free after posting a bond of $250,000.
It is generally against the law for parties that are owed money by insolvent businesses to attempt to seize assets to settle their claims in the United States.
The stock of Robinhood played an important part in the events leading up to the collapse of FTX.
As a reaction to fundraising for the crypto empire's recovery, they were presented in a list as among the most valuable pieces in the crypto empire's possession.
The Chief Executive Officer of Robinhood, Vlad Tenev, stated (3) this month that he expects the company's share to be embroiled in insolvency proceedings shortly. At the time of this writing, a single share of Robinhood stock can be purchased for $7.95. It is down 37% from November months high and down 90% from its all time high.
There is currently no word on when the hearing on FTX's motion will occur, and no date has been announced.