Emergent Fidelity Technologies Files for Chapter 11 Bankruptcy, Sparking Heated Debate Over Robinhood Shares
By Emergent Fidelity Technologies, the Sam Bankman-Fried holding company based in Antigua and Barbuda, has filed for voluntary chapter 11 bankruptcy, reported Bloomberg.[0] This move has sparked heated debate as the company holds 56 million shares of Robinhood Markets (HOOD), a highly sought-after asset worth more than $590 million at the time of publication.[1]
The company was already the target of a lawsuit filed by crypto lending firm BlockFi in November regarding the status of the Robinhood shares.[2] In response, the Department of Justice announced on Jan. 6 that it had seized the shares as well as roughly $20 million in U.S. dollars as part of the case against FTX and its executives.[3]
Court papers state that Bankman-Fried has a 90% stake in the entity, but no longer has control over it.[4] Gary Wang, co-founder of FTX, holds a 10% stake[5] Bankman-Fried is currently facing criminal charges, while Wang has already pled guilty to fraud charges.[6]
The Robinhood shares were pledged as collateral to bankrupt crypto lender BlockFi, which placed its own claim on them last year.[1] The company has only $20.7 million in cash, but the fate of the Robinhood shares is still unclear.[5]
The Chapter 11 filing gives Emergent Fidelity and its liquidators some breathing room.[7] The liquidators' “duties are to the debtor’s creditors, whoever those creditors may be,” said Angela Barkhouse, one of the liquidators, in a sworn court statement.[5]
The case of Emergent Fidelity Technologies Ltd., with case number 23-10149, is before the U.S. Bankruptcy Court for the District of Delaware.[8] The proceedings will start in the coming weeks and everyone is waiting to find out what the future holds for the creditors.[1]
0. “Firm That Held SBF’s 56M HOOD Shares Files For Bankruptcy” The Tokenist, 3 Feb. 2023, https://tokenist.com/firm-that-held-sbfs-56m-hood-shares-files-for-bankruptcy/
1. “The Future of $600 Million Robinhood Shares in Jeopardy as Emergent Fidelity Files for Bankruptcy” Coinpedia Fintech News, 4 Feb. 2023, https://coinpedia.org/news/the-future-of-600-million-robinhood-shares-in-jeopardy-as-emergent-fidelity-files-for-bankruptcy
2. “Sam Bankman-Fried's holding company files for bankruptcy By Cointelegraph” Investing.com, 3 Feb. 2023, https://www.investing.com/news/cryptocurrency-news/sam-bankmanfrieds-holding-company-files-for-bankruptcy-2995330
3. “Sam Bankman-Fried's holding company files for bankruptcy” Cointelegraph, 3 Feb. 2023, https://cointelegraph.com/news/sam-bankman-fried-s-holding-company-files-for-bankruptcy
4. “Sam Bankman-Fried's Emergent Fidelity Technologies Files for Bankruptcy” Yahoo! Voices, 3 Feb. 2023, https://www.yahoo.com/now/sam-bankman-frieds-emergent-fidelity-221634464.html
5. “FTX founder Sam Bankman-Fried’s Emergent Fidelity files for bankruptcy, Robinhood shares fall into limbo” FXStreet, 4 Feb. 2023, https://www.fxstreet.com/cryptocurrencies/news/ftx-founder-sam-bankman-frieds-emergent-fidelity-files-for-bankruptcy-robinhood-shares-fall-into-limbo-202302040057
6. “SBF’s holding company Emergent Fidelity files for bankruptcy” AMBCrypto News, 4 Feb. 2023, https://ambcrypto.com/sbfs-holding-company-emergent-fidelity-files-for-bankruptcy
7. “Bankman-Fried entity that owns Robinhood stake goes bankrupt” Gulf News, 4 Feb. 2023, https://gulfnews.com/business/markets/bankman-fried-entity-that-owns-robinhood-stake-goes-bankrupt-1.93633470
8. “Entity At Center Of FTX-BlockFi Dispute Files For Ch. 11” Law360, 4 Feb. 2023, https://www.law360.com/articles/1572844/entity-at-center-of-ftx-blockfi-dispute-files-for-ch-11
