BlockFi is suing Sam Bankman-Fried, alleging he breached a security covenant. So far, SBF hasn’t faced any lawsuits after the collapse of FTX, but it didn’t take long for a lawsuit to be filed against it.
BlockFi Sues Sam Bankman-Fried to Recover Robinhood Stock
BlockFi adds to the list of collateral victims of FTX’s collapse. Like Genesis or Galois Capital, many companies deplore the fact that millions of dollars of funds are blocked in the FTX account. For others, the situation is even worse. BlockFi, the American trading giant, had to declare bankruptcy last Monday. According to the Financial Times, the company has filed for bankruptcy protection with the New Jersey court.
In the process, she filed a complaint against Emergent Fidelity Technologies, an apartment holding company in Sam Bankman-Fried, according to the Financial Times. The lawsuit seeks to recover shares of Robinhood that the FTX founder had pledged as collateral. The pledge agreement was reportedly completed on November 9, just days before FTX filed for bankruptcy. From there, BlockFi was also forced to suspend much of its operations.
ED&F Man Capital Markets also targeted by the complaint
Also according to the FT, BlockFi is also suing ED&F Man Capital Markets, a Chicago-based global financial brokerage firm. The exchange accuses him of having failed in the negotiation of the assets pledged in this guarantee contract, the same one concluded with Emergent Fidelity Technologies. This guarantee corresponds to Bankman-Fried’s interest in Robinhood.
Earlier this year, the FTX founder reportedly purchased 7.6% of online brokerage Robinhood for $648 million. The complaint states that BlockFi and Emergent Fidelity Technologies entered into an agreement to guarantee payment by an anonymous borrower, with an anonymous common stock as collateral. According to a legal document consulted by the Financial Times, this borrower would be Alameda Research, a company belonging to Bankman-Fried. BlockFi expects a lot from this lawsuit.
Assuming BlockFi wins this lawsuit, there is still a long way to go for the exchange. Indeed, according to the bankruptcy document, the American trading company would have to deal with 100,000 creditors.
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