BlockFi appeals to cancel bankruptcy status for SBF’s offshore investment vehicle

Consequences of the FTX ungraded astatine the hands of its laminitis and erstwhile CEO, Sam Bankman Fried, proceed to surface. 

On Feb. 17, it was reported that the bankrupt crypto lender BlockFi Inc. appealed to the United States Bankruptcy Court successful Wilmington, Delaware, to portion the Chapter 11 bankruptcy protections from SBF’s offshore concern vehicle.

Emergent Fidelity Technologies Ltd. was utilized by the FTX laminitis to purchase a 7.6% involvement successful Robinhood Markets Inc. According to BlockFi’s motion, the bankruptcy presumption of Emergent Fidelity holds small intent and was filed to undermine BlockFi’s ain assertion to shares of Robinhood. 

However, a spokesperson from fiscal advisor Quantuma, Emergent’s liquidators, said the bankruptcy was filed to guarantee extortion for the rights of its creditors, “whoever they whitethorn be.”

Quantuma director Toni Shukla said that fixed that determination are galore parties claiming to beryllium creditors oregon "outright owners" of Emergent’s assets successful assorted lawsuits taking spot successful the U.S.:

“...The [liquidators] judge that Chapter 11 extortion is the lone applicable mode to empower Emergent to support itself, its assets and its creditors’ interests successful the U.S.”

In an affidavit from Shukla, she clarified that Emergent owns nary important assets speech from the shares, on with o$20.7 cardinal successful currency which has been seized by prosecutors. She said it’s “ wrong, and without basis” for BlockFi to assertion the bankruptcy was filed with a information of fees.

Robinhood has commented, saying it would similar to bargain the shares back, though it besides acknowledged that it is uncertain whether it tin bash so. 

Related: Judge allows merchandise of identities of guarantors down Sam Bankman-Fried’s bail

BlockFi is bankrupt since Nov. 28, 2022, erstwhile it filed for Chapter 11 bankruptcy arsenic portion of the contagion from the FTX illness earlier successful the month.

Back successful December, it was FTX who appealed to the bankruptcy justice to stop BlockFi from claiming nearly $450 cardinal worthy of Robinhood shares, which were purchased by SBF.

The justice considered transferring the Robinhood shares claimed by some BlockFi and FTX to either a neutral broker oregon an escrow relationship portion the courts deliberate of their rightful owner.