- BlockFi is suing FTX’s founder to take control of his stake in Robinhood.
- BlockFi filed bankruptcy protection on Monday.
Over the past few weeks, a lot of catastrophic events have taken place in the global cryptocurrency market. Also, the crypto exchange FTX fallout alarmed several big-shot companies and many people in the cryptocurrency community, and the global crypto industry faced cold selling pressure.
While the crypto lending platform BlockFi requested bankruptcy protection on Monday due to “a severe liquidity crisis” imposed by Bankman-Fried’s FTX crashing. In addition, only hours after the bankruptcy request, BlockFi sued FTX founder Sam Bankman-Fried to claim control of Robinhood shares that SBF reportedly committed as collateral just days prior to the FTX fallout.
According to a Financial Times report, BlockFi filed the case in a New Jersey court. And, BlockFi lawsuit targeting Bankman-Fried’s Emergent Fidelity Technologies, demanding that it turn over unspecified collateral. Further, SBF’s investment in online trading firm Robinhood earlier this year was 7.6%.
FTX Collapse Impact
In June, Bankman-Fried positioned himself as a savior for struggling cryptocurrency projects and offered emergency finance to BlockFi in exchange for the possibility to purchase the lender at a fire sale price.
However, many severe upheavals overtook the cryptocurrency markets this year, bringing down the tokens’ price. But the FTX collapse has had a significant negative impact on the cryptocurrency market. Although the industry experienced a string of wave insolvencies, the most prominent cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH), have seen their lowest price range since 2020.
Moreover, BlockFi stated on Monday that Bankman-Fried exposure eventually led to its demise, pointing out that his Alameda Research trading firm had failed on $680 million in collateralized loans in early November.
