According to a December 28 Wall Street Journal report, the judge presiding over BlockFi’s ongoing bankruptcy case has agreed to review a request to transfer 56 million Robinhood shares to a neutral account.
The judge hasn’t agreed to transfer the shares to a neutral location yet. A decision concerning the case will be reached at a court hearing in January 2023.
If BlockFi’s request is granted, the shares will be held in a broker’s or escrow account until a court of law determines the rightful owner of the disputed shares.
Due to its previous dealings with FTX and Alameda Research, BlockFi believes it should own FTX’s Robinhood shares. Alameda pledged the shares to BlockFi as loan collateral shortly before FTX’s collapse in November. Since November 28, when its bankruptcy process began, BlockFi has been trying to get and sell the shares.
However, BlockFi is only one of the entities vying for ownership of the Robinhood shares, and the dispute is being litigated in various jurisdictions. This implies that the dispute may not be resolved in a straightforward approach.
FTX and Alameda Research took steps to secure ownership of the shares last week. Furthermore, FTX CEO Sam Bankman-Fried and investor Yonathan Ben Shimon are both attempting to gain personal control of the shares.
Emergent Fidelity Technologies, a holding company 90% owned by Bankman-Fried, currently holds the disputed shares. The shares were originally purchased by the firm on behalf of Bankman-Fried in May. The shares were worth $482 million at the time.
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