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FTX’s Legal Maneuvering: The Battle Over $600 Million In Robinhood Shares

FTX, the once-dominant cryptocurrency exchange, is embroiled in a legal battle over a substantial asset: $600 million worth of Robinhood shares.

By Akriti Seth

Last Updated: Sep 10, 2024

Fact checked

By Sam Cooling

FTX

FTX, the once-dominant cryptocurrency exchange, is embroiled in a legal battle over a substantial asset: $600 million worth of Robinhood shares. FTX seeks to pay $14 million to Emergent for claims to $600 million of Robinhood shares.

This development adds another layer of complexity to the ongoing saga of FTX’s bankruptcy proceedings. 

FTX’s Bankruptcy: A Quick Recap

FTX filed for bankruptcy in November 2022 following a series of financial missteps and allegations of mismanagement. The collapse sent shockwaves through the crypto industry, affecting numerous investors and creditors.

As the bankruptcy proceedings unfold, various assets tied to FTX have come under scrutiny, with stakeholders vying for claims.

EXPLORE: 10 Best Decentralized Exchanges for September 2024 

Motion Filed By FTX Seeking Court’s Intervention To Resolve Dispute Over Robinhood Shares

Robinhood’s shares were initially acquired by Emergent Fidelity Technologies, a company closely associated with FTX’s founder, Sam Bankman-Fried. 

The acquisition was part of a broader strategy to diversify investments and strengthen FTX’s financial position before its downfall.

However, the ownership and control of these shares have become contentious. Multiple parties, including FTX’s creditors, investors, and other entities, have laid claim to the shares, arguing their entitlement based on various legal and financial grounds.

In response to the competing claims, FTX has filed a motion seeking the court’s intervention to resolve the dispute over the Robinhood shares. 

The motion argues that the shares should be considered part of FTX’s bankruptcy estate, thereby prioritizing the claims of FTX’s creditors and facilitating the distribution of assets as per bankruptcy laws.

FTX’s legal team contends that the shares were acquired using funds that can be traced back to FTX’s operations, thus making them a legitimate part of the bankruptcy estate. 

This argument is crucial for FTX’s creditors, who are eager to recover their investments from the exchange’s remaining assets.

EXPLORE: 9 Methods to Buy Bitcoin With PayPal Instantly in 2024

Court Hearing To Be Held On 22 October 2024

As the legal proceedings continue, the cryptocurrency community awaits the court’s decision with bated breath. 

The outcome will not only determine the fate of the $600 million in Robinhood shares but also influence the future landscape of cryptocurrency regulations and asset management.

Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.

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Disclaimer
Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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Akriti Seth
Akriti Seth
Editor

Akriti Seth is a Zurich-based Business Journalist and Crypto Editor. Her passion for journalism has taken her across the globe – from thriving as an on-television correspondent to writing engaging articles, she has worked for companies like Informa UK, Bloomberg... Read More

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