• FTX is seeking help from a U.S. bankruptcy court to fight over ownership of $450 million in Robinhood Markets (HOOD) stock.
• The stock is held by a corporate entity organized in Antigua and Barbuda and 90% controlled by former FTX CEO Sam Bankman-Fried.
• FTX has asked the judge overseeing the bankruptcy case to keep the shares frozen while they figure out how to repay all their creditors.
FTX, a crypto exchange, has requested assistance from a U.S. bankruptcy court as they battle over ownership of approximately $450 million worth of stock in Robinhood Markets (HOOD). This stock is held by a corporate entity organized in Antigua and Barbuda, Emergent Fidelity Technologies Ltd., and 90% of it is controlled by former FTX CEO Sam Bankman-Fried. As the battle ensues, three parties have attempted to get control of these shares: BlockFi, Yonathan Ben Shimon, and Bankman-Fried.
In response, the bankruptcy estate of FTX has asked ED&F Man Capital Markets, the brokerage where the shares are parked, to freeze the stock around the time the Chapter 11 case began on Nov. 11th. FTX has determined that Emergent only “nominally” owns the shares and that they truly belong to FTX. The filing states that “Emergent is a special-purpose holding company that appears to have no other business.”
In the filing, FTX has asked the judge to keep the shares frozen while they figure out how to repay all their creditors. FTX argues that since multiple prepetition creditors and Bankman-Fried himself are all trying to obtain possession of the Robinhood Shares, the asset should be frozen until the court can resolve the issues in a fair manner.
This battle over ownership of the Robinhood Shares reflects a much larger issue that FTX is facing. With the help of the U.S. bankruptcy court, FTX is hoping to resolve this issue and be able to repay all their creditors in a fair and equitable manner. It remains to be seen how the judge will respond to FTX’s request.