- BlockFi has asked the U.S. bankruptcy court to dismiss a bankruptcy case filed by Sam Bankman-Fried’s (SBF) Emergent Technology company.
- The tussle is over control of 55 million Robinhood shares, which were used to secure a $600 million loan from BlockFi.
- BlockFi argued that Emergent Technology is ineligible for bankruptcy protection because it has no property in the U.S.
Crypto lender BlockFi and Sam Bankman-Fried’s (SBF) Emergent Technology company are at odds over a tussle to control 55 million Robinhood shares. SBF owned 90% of shares in Emergent Technology — a company he co-founded with Gary Wang solely to purchase Robinhood shares. The Robinhood shares were reportedly worth $455 million and had been used by SBF to secure a $600 million loan from BlockFi, however they were seized by the U.S government following FTX’s collapse.
Emergent Files For Bankruptcy
In response, Emergent Technology filed for bankruptcy on Feb. 3 claiming that the 55 million Robinhood shares pledged to BlockFi belonged to its estate. This would mean that the company would be able to reclaim them despite their seizure by the U.S government, giving them an unfair advantage over other creditors vying for access to these funds.
BlockFi Responds With Counter Motion
In response, BlockFi filed a counter-motion on Feb 16 arguing that Emergent’s bankruptcy case was futile as it was ineligible for bankruptcy protection under the bankruptcy code due to its lack of property in the United States; “Emergent has no employees, no income, and no business; its sole assets were shares in Robinhood Markets Inc.“ Furthermore, they claim that this case was engineered solely in order to enrich joint provisional liquidators Angela Barkhouse and Toni Shukla who are seeking legal control of the seized Robinhood Shares via this route..