Crypto exchange FTX (CRYPTO: FTT) has sought help from a U.S. bankruptcy court in a dispute over ownership of Robinhood Markets Inc (NASDAQ:HOOD) stock valued at roughly $450 million, according to a petition filed on Thursday.
About 56 million shares of the brokerage owned by Emergent Fidelity Technologies Ltd. are under question here.
The filing states that three parties have attempted to gain control of those shares: cryptocurrency lending and trading platform BlockFi, which FTX assisted in supporting earlier this year; Yonathan Ben Shimon, an FTX creditor who was appointed as a receiver in Antigua and given permission to sell the shares while being supervised by its court; and Bankman-Fried.
When the Chapter 11 case started on Nov. 11, the bankruptcy estate for FTX instructed the brokerage where the shares are parked, to halt trading in the stock.
Emergent Merely "Nominally" Controls The Shares
According to FTX, the shares belong to FTX, not Emergent, which only "nominally" controls them.
"Emergent is a special-purpose holding company that appears to have no other business," FTX stated in the filing.
It further stated the shares should be ordered to stay frozen while it tried to come up with a plan to pay off all of its creditors.
"The fact that multiple prepetition creditors of different Debtors and Mr. Bankman-Fried are all seeking to obtain possession of the Robinhood Shares demonstrates that the asset should be frozen until this Court can resolve the issues in a manner that is fair to all creditors of the Debtors," the crypto exchange stated.