FTX Pursuing Judicial Intervention in $440M Robinhood Shares Battle

FTX Group is searching for judicial intervention in its battle to retain its Robinhood shares.

The company reached out to a U.S. bankruptcy judge on Thursday (Dec. 22) in an attempt to maintain the company’s rights to over more than $440 million of Robinhood shares tied to Alameda Research, the crypto trading platform owned by previous FTX CEO Sam Bankman-Fried.

According to Bloomberg, both crypto lending platform BlockFi and FTX claim to own nearly 56 million shares, as both companies want to use them to recover from their debts.

“The Robinhood shares played a prominent role in the run-up to FTX’s implosion. They were touted in a spreadsheet as being some of the crypto empire’s most valuable, liquid assets amid efforts to drum up rescue financing,” the report said.

This is only the latest in a long line of legal troubles that FTX and Bankman-Fried are currently facing.

Most recently, Bankman-Fried was released from prison on Dec. 22 on a $250 million bond.

The release came during his first U.S. court appearance. He was also ordered to live at his parents’ home in California, be electronically monitored and restrict his travel to parts of California and New York. 

According to reports at the time, Magistrate Judge Gabriel Gorenstein in New York City said he agreed to the deal because he believed Bankman-Fried wasn’t a flight risk, didn’t pose a risk to the community and would be easily recognized if he tried to hide.

Bankman-Fried’s release on bail happened on the same day that former Alameda Research CEO Caroline Ellison pleaded guilty to fraud.

In a recently unsealed plea agreement, Ellison admitted guilt to all seven fraud charges levied against her for her active role in FTX’s downfall.

FTX co-founder and engineering leader Gary Wang also pleaded guilty on Thursday to four fraud charges and has agreed to cooperate with the U.S. Department of Justice in exchange for being released on bail.

While acquiring the Robinhood shares would be helpful in alleviating some of FTX’s financial woes, it’s clear that the bankrupt crypto company is not yet done dealing with other charges and regulatory scrutiny.