The bankrupt crypto lending platform BlockFi is suing Sam Bankman-Fried’s holding company to recover collateral.
According to a recent complaint filed in a court in New Jersey, BlockFi says it “seeks to enforce the terms of a pledge agreement” it had with Emergent Fidelity Technologies, a holding company for Bankman-Fried, the disgraced former CEO of the bankrupt crypto exchange FTX.
The Financial Times reports that the collateral has shares in the retail trading giant Robinhood. Bankman-Fried purchased 7.6% of the popular securities trading network earlier this year.
BlockFi announced its voluntary Chapter 11 filing earlier this week, naming the collapse of FTX as the primary cause.
Reads a blog post from the company,
“This action follows the shocking events surrounding FTX and associated corporate entities (‘FTX’) and the difficult but necessary decision we made as a result to pause most activities on our platform.”
Back in July, FTX’s US arm, FTX.US, was closing in on a $240 million deal to buy the lending platform.
At the time, BlockFi CEO Zac Prince cited the Celsius and Three Arrows Capital (3AC) collapses as the motive for the deal.
Bankman-Fried is accused of mishandling billions of dollars of customer funds by loaning them out to Alameda Research, a trading firm he also founded. US federal regulators are reportedly probing the scandal. Turkey is also investigating FTX and Bankman-Fried for possible fraud crimes.
The U.S. House of Representatives Financial Services Committee also reportedly plans to hold a December hearing to investigate FTX’s collapse.
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