BlockFi Sues Sam Bankman-Fried over Robinhood Inventory Collaterals

BlockFi files for bankruptcy and appears in court using emerging consistency applied sciences
BlockFi is bringing Sam Bankman-Fried’s Emergent Constancy Applied sciences to court in order to take possession of Robinhood shares (HOOD), which were pledged as collateral to the cryptocurrency lending platform. BlockFi filed for chapter safety on Monday.
BlockFi and Emergent Constancy Applied sciences agreed on November 9 to guarantee the cost by an unidentified borrower by pledging unidentified extensive shares in response to the court documents. A Financial Times report states that Robinhood’s shares are pledged, and Bankman-Fried’s Alameda Analysis is the borrower from BlockFi.
A majority interest in the online broker Robinhood was rumoured to have been purchased by Bankman-Fried, who earlier this year paid $648 million for a 7.6% holding in the company. It was, however, formally refuted, with the statement that “no active” merger and acquisition discussions existed.
Days prior to FTX’s collapse, a loan was obtained with HOOD as collateral. According to the media allegation, Bankman-Fried sold his Robinhood shares even after using BlockFi to secure a loan for them.
BlockFi first denied that the demise of FTX had any impact on its operations. But within a few days, the platform stopped all activity, including withdrawals, indicating that it was exposed to FTX.
The commercial risks of BlockFi were made public on Monday when the company declared bankruptcy, citing the loss of FTX as the cause of “a severe liquidity crunch.” Furthermore, Alameda Research missed payments on $680 million in BlockFi collateralized loans at the beginning of November.
Concurrently, last July, BlockFi obtained a $400 million credit facility from FTX US, which gave the exchange the authority to purchase the lending platform. Certain performance standards would determine the conditions of the acquisition agreement.
BlockFi disclosed in its bankruptcy filing that company has liabilities in the same range as its assets, which range from $1 billion to $10 billion. The company’s creditor count exceeds 100,000.

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