Sam Bankman-Fried is arguing that he really should keep regulate of close to $450 million in shares of money investing application Robinhood Marketplaces (HOOD), disputing a rival claim by the estate of the company he established and when ran, the bankrupt crypto exchange FTX.
The 56 million shares, in theory owned by Bankman-Fried and co-founder Gary Wang by way of a keeping firm named Emergent Fidelity Technologies, are the issue of a sophisticated lawful fight that also consists of bankrupt crypto lender BlockFi and the U.S. Justice Section.
In a Dec. 22 filing with the U.S. Individual bankruptcy Court in Delaware, FTX – now underneath the management of restructuring professional John Ray III – claimed the shares were only nominally held by Emergent Fidelity and should really be frozen until eventually they can be divided up pretty among the FTX lenders. Its assert was supported by those liquidating the business in the Bahamas.
Bankman-Fried opposed that idea in a court submitting Thursday, arguing that he and Wang experienced legitimately purchased the shares making use of funds borrowed from FTX’s investing arm, Alameda Exploration, and that the bank loan was documented. BlockFi, a loan company that FTX last year attempted to prop up right before it also submitted for bankruptcy, also opposed Bankman-Fried’s attempt to seize manage of the shares in a separate court filing on Thursday.
“It is improper for the FTX debtors to inquire the court docket to merely assume that all the things Mr. Bankman-Fried ever touched is presumptively fraudulent,” Bankman-Fried’s submitting said. “Mr. Bankman-Fried involves some of these money to pay for his prison defense.”
Bankman-Fried, who this week pleaded not guilty to federal legal charges such as revenue laundering and conspiracy to commit wire fraud, resigned as FTX’s CEO on Nov. 11, the very same day FTX filed for Chapter 11 bankruptcy in Delaware following a CoinDesk report that confirmed the unusually restricted ties between FTX and Alameda.
FTX’s new administration argued in December that Emergent Fidelity, owned 90% by Bankman-Fried and 10% by Wang, was a shell organization, whose pursuits have been “sufficiently identical” to individuals of the wider enterprise. Ray has previously complained of faulty report-trying to keep at FTX, and in particular of transfers currently being made to team with out appropriate documentation.
In any case, the filings concede, the debate may perhaps establish academic, following a representative of the U.S. Department of Justice informed the court docket Wednesday that the govt was seizing the shares as element of its proceedings against Bankman-Fried.
Read extra: US DoJ Is Seizing Banking Property, Robinhood Shares Connected to FTX, Court docket Informed