Last Updated on January 6, 2023 by Bitfinsider
Sam Bankman-Fried, co-founder of FTX, has launched a court lawsuit to prevent debtors from seizing control of his nearly $450 million investment in brokerage Robinhood.
According to a court document dated Thursday, lawyers for the disgraced exchange head contended that the shares do not belong to any of the FTX-related firms presently in bankruptcy proceedings, and that Bankman-Fried needed the money to finance his legal fees.
FTX, sibling hedge fund Alameda Research, and other linked entities are now in bankruptcy and under the jurisdiction of court-appointed liquidators, and they are demanding access to whatever assets they can uncover, including the Robinhood shares, in order to repay FTX’s nearly 1 million creditors.
Failed crypto lender BlockFi, an FTX creditor’s lawsuit, and the US Department of Justice have all sought possession of the shares.
Bankman-Fried and fellow FTX co-founder Gary Wang purchased their 56.2 million share investment in Robinhood through Emergent Fidelity Technology, a special purpose company. According to the petition, the two individuals borrowed money through promissory notes to acquire the shares from Alameda.
“The FTX Debtors want to ignore the independent existence of a business that is not a party to this case and encumber hundreds of millions of dollars in assets to which they have no lawful claim,” according to Bankman-Fried’s petition.
According to the petition, Bankman-Fried is counting on his Robinhood investment to support his criminal defense. “Withholding expenditures required for a proper criminal defense can constitute irreparable loss,” the petition continued, citing a previous court judgment. “In contrast, the FTX Debtors face solely the prospect of economic loss.”
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