Blockchain lender BlockFi sues Sam Bankman-Fried for seizing his stake in Robinhood. The FTX founder allegedly pledged Robinhood shares as collateral just days before his exchange collapsed. BlockFi filed for bankruptcy protection on Monday, citing “a severe liquidity crunch”.
BlockFi Filing Complaint
The filing, which was first reported by The Financial Times, came just hours after BlockFi filed for bankruptcy, citing “a liquidity crisis” caused by exposure to SBF’s FTX exchange and its sister hedge fund firm Alameda research.
BlockFi sued Bankman-Fried’s Emergent Fidelity Technologies in the same New Jersey court where it filed for bankruptcy. It demanded undisclosed collateral.
According to loan documents seen by the Financial Times, the stake that Bankman-Fried has in the online trading company Robinhood is at stake. At the beginning of this year, he bought 7.6% of Robinhood.
A deal made on November 9 said that these assets would be given to BlockFi. This is what the filing says.
The bankrupt lender said it will now try to “enforce the terms of a pledge agreement and recover collateral that is property to these bankruptcy estates.”
FTX founder finds funds
The Financial Times also says, based on unnamed and unconfirmed sources, that Bankman-Fried put his stake in Robinhood on a list of his assets as he made last-ditch efforts earlier this month to try to save FTX by getting investors to give him money.
In August 2022, FTX made a $70 million offer to buy troubled crypto lender Voyager. The company is now scrambling to find a new buyer.