$500M Robinhood Shares Move to Neutral Account Pending BlockFi Bankruptcy Case

– Judge Michael Kaplan is considering moving 56 million Robinhood shares worth almost $500 million to a neutral account under US jurisdiction pending the outcome of the BlockFi bankruptcy case.
– The shares were purchased by FTX’s former CEO, Sam Bankman-Fried, through his holding company, Emergent FIdelity Technologies ltd, in April 2022.
– Judge Kaplan will give his decision at the next hearing scheduled for January 9, 2023.

The US bankruptcy court is currently considering a request from the crypto lender BlockFi to move the disputed Robinhood shares bought by Sam Bankman-Fried, the former CEO of FTX, to a neutral broker pending the outcome of the Bankruptcy case. The shares, worth almost $500 million, were bought by Emergent FIdelity Technologies ltd, Bankman-Fried’s holding company, in April 2022 and represent a 7.6% stake in Robinhood.

BlockFi has sued Bankman-Fried and believes the shares should be claimed by them as they had been used as collateral for a $600 million loan granted to Alameda Research prior to the collapse of FTX in November.

Adding to the ongoing legal wranglings, fresh evidence has emerged showing Bankman-Fried bought the shares using funds borrowed from Alameda Research. He now faces multiple charges including money laundering and wire fraud.

Judge Michael Kaplan has agreed to review the BlockFi request to move the shares to a neutral account under the jurisdiction of the United States, where they will remain in escrow until the court determines who the shares should go to once the case is settled. The judge will give his decision at the next hearing scheduled for January 9, 2023.

It remains to be seen how the case will end and who will eventually claim the 56 million Robinhood shares.