BlockFi one of the leading cryptocurrency lender is reportedly suing Emergent Fidelity Technologies. The company of FTX’s embattled founder Sam Bankman-Fried for how it used its shares in investing app Robinhood, sending yet another tremor through the crypto market.
Citing loan documents, the Financial Times reported on Monday that Robinhood shares held by the company pledged to use BlockFi as collateral. The news came as BlockFi filed for bankruptcy protection on the same day.
Cryptocurrencies, and especially lenders and exchanges, have been under pressure since FTX’s colossal demise this month which has contaminated the industry.
FTX was a company valued at $32 billion before it filed for bankruptcy on November 11 following reports of a liquidity crisis, resulting in customers damanding withdrawals.
Adding to the pressure, rival exchange Binance went back on a nonbinding agreement to buy the company.
Investigations in the wake of the collapse have since exposed gross negligence in how FTX was run.Trying to raise money before FTX’s collapse, Bankman-Fried was still trying to sell his Robinhood shares, the Finanial Times reported.