Controversial crypto entrepreneur Sam Bankman-Fried, the former CEO of collapsed exchange FTX, is battling for control of $460 million worth of Robinhood shares. Bankman-Fried has asked a bankruptcy court to deny a motion by the new FTX management to seize the shares, claiming in a court filing that he requires the funds “to pay for his criminal defense,” and that a “financial inability to defend oneself has serious consequences, and is irreparable.” In contrast, the filing notes that FTX customers only face “the possibility of economic loss.”

Bankman-Fried’s court filing states that the disputed Robinhood shares, which number 56,273,269, are not owned by Alameda Research or any other entity connected to the FTX bankruptcy. Rather, they are owned by Emergent Fidelity Technology Ltd., a company that is 90% owned by Bankman-Fried. The filing explains that Bankman-Fried and Gary Wang, another FTX executive, borrowed the funds from Alameda to allow Emergent to purchase the Robinhood shares.

The former FTX CEO has argued that the new FTX management has failed to demonstrate that the automatic stay on the Robinhood shares, which has been requested in a motion to the court, is necessary. Bankman-Fried has also pointed out that the U.S. Department of Justice has obtained a warrant to seize the shares, rendering the stay motion “moot.”

The court filing has sparked outrage on social media, with many claiming that Bankman-Fried is prioritizing his own interests above those of FTX customers, who have been left out of pocket following the exchange’s collapse. One Twitter user wrote: “This is one of the most disgusting lines I’ve ever read. Associating your name with a claim that debtors’ economic loss isn’t a matter of life and death for some people is heartless and out of touch. What happened to ‘Nothing matters more than making customers whole’?”

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Filed under: Bitcoin - @ January 9, 2023 7:31 am