Bankrupt cryptocurrency lender BlockFi is suing Sam Bankman-Fried over shares in Robinhood that the FTX founder allegedly pledged as collateral earlier this month.
Just hours after submitting for chapter safety, BlockFi on Monday sued Bankman-Fried’s Emergent Fidelity Technologies automobile, demanding he flip over unspecified collateral BlockFi says it’s owed. The criticism was filed in the identical New Jersey courtroom the place BlockFi initiated chapter proceedings.
The collateral at problem is Bankman-Fried’s stake in Robinhood, the web buying and selling firm, based on mortgage paperwork seen by the Financial Times. He purchased 7.6 per cent of Robinhood earlier this 12 months.
The dispute is the newest blow to Bankman-Fried, whose $32bn FTX empire collapsed this month in what’s the greatest insolvency of this 12 months’s disaster in crypto markets. Authorities within the US and the Bahamas, the place FTX was headquartered, have launched investigations.
BlockFi’s chapter submitting shed additional gentle on Bankman-Fried’s fall, exhibiting that his failed crypto buying and selling agency Alameda Research defaulted on $680mn of collateralised loans in early November.
The criticism claims that BlockFi entered into an settlement with Emergent on November 9 to ensure the cost obligations of an unnamed borrower by pledging sure “common stock” as safety.
Earlier in November, the Financial Times reported that Bankman-Fried had been privately making an attempt to promote the Robinhood shares utilizing the safe messaging app Signal within the days main as much as FTX’s chapter submitting on November 11.
BlockFi additionally named brokerage ED&F Man Capital Markets in its lawsuit, saying the London-based firm was the dealer concerned within the pledge settlement. ED&F Man has “refused to transfer the Collateral to BlockFi”, the lender states within the criticism.
BlockFi, Bankman-Fried and ED&F Man didn’t instantly return requests for remark.