Why BlockFi Sues FTX Sam Bankman-Fried Following Bankruptcy Filing!
BlockFi Sues Sam Bankman-Fried Following Bankruptcy Filing!
Lawsuit Against Sam Bankman-Fried
Just hours after the cryptocurrency lender BlockFi first announced their filing for a chapter 11 bankruptcy, the company also revealed itself to be filing a lawsuit against former FTX CEO Sam Bankman-Fried.
Filed on November 28th, the lawsuit was filed in the same New Jersey court where it initiated bankruptcy proceedings and targeted Sam Bankman-Fried’s holding company, Emergent Fidelity Technologies, arguing that it had defaulted on its obligations under a Nov. 9 pledge agreement.
Related: BlockFi Files for Bankruptcy due to FTX Contagion
BlockFi hints at the collateral as “including certain shares of common stock.” This suggests that BlockFi is seeking to seize Bankman-Fried’s 7.6% shares in Robinhood that were pledged as collateral earlier in November.
At the moment, it’s thought that SBF’s shares in Robinhood are currently worth around $620 million at current prices.
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
— ayko2718 (@ayko2718) November 29, 2022
BlockFi Bankruptcy Filing
Despite previously denying that a majority of their assets were held in FTX just earlier this month, it seems that BlockFi had a big enough exposure to the collapses and now-bankrupt crypto exchange to have caused BlockFi to have also filed for bankruptcy.
In its bankruptcy filing, BlockFi revealed that it has between $1 billion and $10 billion in assets with liabilities in the same range. Along with that, the crypto lending company also had over 100,000 creditors with the biggest creditor being owed a whopping $729 million.
Related: NFT Startup Candy Digital Lays Off Roughly 100 Staff
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