FTX hopes that the judge will enforce an automatic stay on Robinhood shares.
FTX, a now-bankrupt cryptocurrency exchange established in 2019, has asked for the United States Bankruptcy judge’s help to prevent BlockFi from claiming Robinhood shares.
The motion comes as response to BlockFi’s lawsuit against Sam Bankman-Fried’s holding company Emergent Fidelity Technologies. In the lawsuit filed on November 28th, BlockFi revealed that it aims to obtain Sam Bankman-Fried’s Robinhood shares that the FTX co-founder allegedly pledged as collateral for BlockFi’s loan to Alameda Research.
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It is worth noting that both Alameda Research and FTX filed for bankruptcy before settling for BlockFi loans.
According to the FTX’s motion, the bankrupt crypto exchange is asking the court to enforce an automatic stay.
In a nutshell, an automatic stay is the United States bankruptcy law that temporarily prevents creditors from pursuing debtors for the funds that they owe.
In the motion, FTX claimed that the BlockFi desired shares belong to Alameda Research. In addition, the bankrupt crypto exchange emphasized that all shares owned by FTX-related companies should remain intact pending investigations into claims to their ownership.
Apart from BlockFi, Sam Bankman-Fried and FTX creditor Yonathan Ben Shimon are also claiming their ownership of the shares discussed in the motion.
FTX also offered an alternative version if the court determines to dismiss the first suggestion issued by the crypto exchange. In the second suggestion, FTX asks the court to “extend the automatic stay,” which will “ensure that all creditors—including BlockFi and the others—can participate in an orderly claims process.”
This week was rather eventful for FTX. On December 20th, the news broke that Sam Bankman-Fried agreed to be extradited to the United States. The next day, on December 21st, the former FTX CEO signed documents waving his right to fight extradition and was handed to the FBI to be transferred to the United States.
Finally, on December 22nd, the man stood before the court and was released on bail. It is worth noting that, on the same day, former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang pleaded guilty to federal fraud charges.