BlockFi sues Sam Bankman-Fried's Emergent Fidelity Technologies to seize Robinhood shares that SBF had pledged as collateral under an agreement on November 9
Complaint against FTX founder comes as crypto company becomes the latest to seek bankruptcy protection
Financial Times
Context & Ripple Effects
The disputed shares had already surfaced in FTX’s pre-bankruptcy balance sheet, where Robinhood stock held by an SBF entity sat outside the listed bankruptcy filings. BlockFi’s claim turns that disclosure into a creditor fight over a specific pool of collateral.
BlockFi had paused withdrawals and was reportedly preparing its own bankruptcy filing after receiving an FTX US credit line, making recovery on pledged assets especially consequential for its creditor process.
First-order effects
BlockFi seeks control of the Robinhood shares pledged by Emergent Fidelity Technologies, putting an asset associated with SBF at the center of its recovery effort.
The suit adds a defined collateral claim to BlockFi’s bankruptcy-era balance-sheet pressures, rather than leaving its exposure to the FTX group solely tied to the credit line.
Second-order effects
FTX’s estate and other claimants to assets associated with SBF have a stronger reason to scrutinize whether the Robinhood stake belongs to Emergent, BlockFi, or the broader FTX-related creditor pool.
The litigation makes the legal status of affiliate-held collateral more important for lenders that extended credit around FTX-linked entities.
Third-order effects
If similar claims proliferate, crypto insolvencies will be shaped not only by exchange liabilities but by documentation and ownership of assets pledged through founder-controlled affiliates.
The episode points to a more creditor-driven unwinding of interconnected crypto firms, with recovery disputes concentrating on identifiable collateral rather than broad enterprise value.
The trend: FTX’s collapse is shifting crypto-credit losses into contests over collateral held across affiliated entities and founder-linked vehicles.
So BlockFi is a creditor to FTX that lent to Alameda that lent to Emergent which is a shell company owned by SBF that bought Robinhood shares that were pledged as collateral to guarantee to BlockFi the loan to FTX that was used to bailout BlockFi itself
For those paying attention in July, they wouldve noticed SBF + Blockfi accusing us of “double pledging collateral” via 3rd tier media. I was baffled when I first saw it, since our own creditors/liquidator have never mentioned this. Now it makes more sense. https://twitter.com/...
Our scoop from @kadhim @alexandrascaggs and me SBF pledged Robinhood shares to BlockFi in a race to save his crypto companies from bankruptcy, but he continued to try to sell the shares privately. Now untangling who has claim to the shares will be messy. https://www.ft.com/... ht…
I mean... this is a headline from “the onion”. “A bankrupt company sues a fraudster to capture shares of a company named after a legend who steals from the rich to give to the poor”. https://www.ft.com/...
Alice loans Bob $1 billion. Bob loans Charlie $1 billion. Charlie loans Alice $1 billion. All three now have a $1 billion asset on their balance sheets. https://twitter.com/...
Imagine going back from Nov 2022 to Nov 2021 when #BTC was at $69k and tweeting that in one year: 📉 Btc: 15k 💀 Ftx, Luna, BlockFi, Celcius, 3AC, Alameda: Dead 👮🏻♂️Do Kwon, SBF, SuZhu: Wanted 🐦Elon: Owns Twitter 🤯 CRAAAAZY YEAR 🤯
BlockFi, on the other hand, was very clear in its TOS that it was not custodian or fiduciary of any customer assets. And that, in legal fallout terms, could be the difference between a “money” problem and a “prison” problem.
The FTX Terms of Service (at 8.2.6) are VERY clear. All digital assets were to be held in users accounts and NOT be used by FTX for any purpose (E.g. speculative investments). There's no wiggle room. It's what I would call a “gran problema” for them. https://twitter.com/...
1/ Today #BlockFi filed for bankruptcy. And #BlockFi suspended user withdrawals on November 11. After suspending withdrawals, #BlockFi transferred 27,806 $ETH ($33M) to #Gemini, and transferred stablecoins worth about $3.8M to address 0x22ff.👇 https://www.businesswire.com/ ...
imagine that. the multi trillion hedge fund industry , media darlings just now figuring it out? medusa and her chess pawn caught it first https://twitter.com/...
SCOOP: BlockFi is suing Sam Bankman-Fried to seize his stake in Robinhood ($HOOD). The bankrupt crypto lender claims SBF pledged his Robinhood shares as security just days before FTX and Alameda collapsed. w/ @AntoineGara @alexandrascaggs https://www.ft.com/...
is it Effective Altruism when you pledge your personal shares to secure your company's debt? Great puzzle-putting-together from @kadhim @AntoineGara @alexandrascaggs: https://twitter.com/...
How Michael Lewis explains this will be interesting reading. BlockFi said the Alameda Research defaulted on $680mn of collateralised loans in early November." Bankman-Fried's Emergent Fidelity Technologies controlled the collateral (Robinhood shares). https://www.ft.com/...
Hours after BlockFi filed for bankruptcy, it filed a lawsuit against SBF's holding company, demanding that it hand over $575 million worth of Robinhood (HOOD) stock it borrowed as collateral. FT reported https://www.ft.com/...