Sam Bankman-Fried or SBF is alleged to have pledged Robinhood shares to the business as collateral in a lawsuit filed by crypto lender BlockFi, according to the Financial Times.
Approximately 56.2 million shares, or 7.6%, of Robinhood Class A common stock were owned by Bankman-Fried, according to a filing with the Securities and Exchange Commission.
Documents reveal that these Robinhood shares are now at the center of a lawsuit brought by BlockFi just hours after the lender requested bankruptcy protection in the same New Jersey court.
SBF’s Emergent Fidelity Technologies and ED&F Man Capital Markets are named in the lawsuit for allegedly failing to properly broker the pledged assets in question, according to the filing.
The complaint stated that EDFM “has refused to transfer the collateral to BlockFi” after Emergent entered a state of default with BlockFi and the lender attempted to take custody of the Robinhood shares used as security.
BlockFi still has a long way to go if it wins the Robinhood shares in question; the company’s bankruptcy documents list 100,000 creditors and anywhere between $1 billion and $10 billion in assets and liabilities.