Bankman-Fried Robinhood shares are the target of a BlockFi lawsuit

https://www.theblock.co/post/190481/bankman-fried-robinhood-shares-are-the-target-of-a-blockfi-lawsuit

A lawsuit filed by crypto lender BlockFi demands Robinhood shares Sam Bankman-Fried is said to have pledged to the company as collateral, the Financial Times first reported.

Bankman-Fried owned about 56.2 million shares or 7.6% of Robinhood Class A common stock, according to a document filed with the Securities and Exchange Commission.

Now those Robinhood shares are at the center of a lawsuit filed by BlockFi in the hours after the lender petitioned for bankruptcy protection in the very same New Jersey court, documents show. Named in the suit are Bankman-Fried’s Emergent Fidelity Technologies, and ED&F Man Capital Markets which allegedly failed to properly broker the pledged assets in question, the filing said.

After Emergent entered a state of default with BlockFi, the lender sought to take custody of collateral shares of Robinhood as per the forbearance terms of the agreement, however, "EDFM has refused to transfer the collateral to BlockFi,” the complaint said.

BlockFi still has a long way to go if it wins the Robinhood shares in question, with anywhere between $1 billion and $10 billion in assets and liabilities alongside an estimated 100,000 creditors, according to the company’s bankruptcy documents.

Neither ED&F Man, nor Robinhood immediately responded to The Block’s request for comment.