Illustration shows BlockFi logo
BlockFi logo is seen in this illustration, November 28, 2022. Reuters

Collapsed crypto exchange FTX on Thursday asked a U.S. bankruptcy judge to stop crypto lender BlockFi from laying claim to more than $440 million worth of Robinhood stock purchased by indicted FTX founder Sam Bankman-Fried.

BlockFi had filed a lawsuit on Nov. 28 demanding the turnover of 56 million Robinhood shares that were allegedly pledged as collateral for BlockFi's loans to the FTX-affiliated crypto hedge fund Alameda Research.

But FTX and Alameda went bankrupt without repaying the BlockFi loans, and U.S. bankruptcy law protects the companies from debt collection efforts like BlockFi's lawsuit, FTX said in a filing in U.S. bankruptcy court in Delaware.

FTX said it believes that the shares are actually owned by Alameda Research, and that the bankrupt FTX companies must hold onto the stock while investigating other disputed claims to the equity shares' ownership.

Bankman-Fried himself has claimed ownership of the Robinhood shares, and an individual FTX creditor has asked a court in Antigua, where FTX is incorporated, to make the Robinhood shares available to repay FTX creditors, according to FTX.

FTX said Bankman-Fried sought to claim the Robinhood shares as "a source of payment for legal expenses." Bankman-Fried was arraigned Thursday in New York on fraud charges, and released on a $250 million bond.

FTX, Alameda, and more than 100 FTX affiliates filed for bankruptcy protection on Nov. 11, after a three-day period in which customers withdrew $6 billion in assets from the crypto exchange.

FTX argued that BlockFi is attempting "an end-run" around U.S. legal protections for bankrupt companies by tailoring its lawsuit to target a non-bankrupt holding company rather than Alameda. Even though the company, Emergent Fidelity, holds the Robinhood shares, Alameda ultimately owns the shares and owes the debt to BlockFi, according to FTX.

BlockFi did not immediately respond to a request for comment.

Emergent holds a 7.42% share of Robinhood, according to Refinitiv data. Bankman-Fried began building his stake in Robinhood in the middle of March, according to a U.S. Securities & Exchange Commission filing.