56 Million HOOD Stocks Will Be Liquidated As FTX Creditors Circle

Sam Bankman-Fried, BlockFi and other creditors attempt to claim ownership of 56 million HOOD shares. FTX urges court to freeze assets,

Robinhood (HOOD) price could fall further as several creditors including Sam Bankman-Fried and bankrupt crypto exchange BlockFi claim ownership of the stock.

Sam Bankman-Fried bought these 56 million shares, giving him a 7.6% stake in Robinhood, earlier this year. HOOD is trading down more than 90% from its all-time high.

hood price
Source: TradingView

Earlier this month, analysts at Citigroup predicted that Robinhood, the stock and crypto trading platform, could be the latest victim of the FTX collapse.

FTX’s filing with the US Bankruptcy Court for the District of Delaware noted that three stakeholders, including Sam Bankman-Fried, have filed court actions to gain control of HOOD stock.

Custody of the stock is held by Emergent Fidelity Technologies Limited, a special purpose holding company. Sam Bankman-Fried holds a 90% stake in the holding company, according to the filing.

The filing claims that Sam Bankman-Fried has repeatedly demanded a payment source for legal expenses. Will he liquidate his HOOD holdings to pay legal costs?

FTX Files Motion To Freeze Stocks

Along with Sam Bankman-Fried, bankrupt crypto exchange BlockFi, and Yonathan Ben Shimon (a prepetition creditor of FTX Trading) have claimed ownership of HOOD stock.

BlockFi, affected by the FTX contagion, filed for Chapter 11 bankruptcy last month. Following the bankruptcy filing, BlockFi sued Sam Bankman-Fried for the HOOD shares in order to recover some of the capital for the proceedings.

Prior to filing for bankruptcy, Alameda Research, under Caroline Ellison, pledged more than $1 billion in additional assets to BlockFi to secure Alameda’s outstanding debt obligations. According to a recent filing with FTX, the HOOD stocks were part of the pledge.

Due to claims from multiple creditors, John J. FTX led by Ray III filed a motion to freeze HOOD shares until the issue is resolved. The filing reads, “The fact that various debtors and multiple prepetition creditors of Mr. Bankman-Fried are seeking to obtain possession of all Robinhood shares indicates that the assets should be frozen until this Court so orders.” cannot resolve issues with what is reasonable. In service, all G.”

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BeInCrypto has reached out to the company or the person involved in the story for an official statement regarding the recent development, but has yet to hear back.

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