Emergent Fidelity Technologies, another SBF vessel takes on water

Sam Bankman-Fried, would he hope to see the end of the tunnel in 2023? So last year has been horrible to him on all counts, especially after FTX filed for bankruptcy. Oh how he would like to see the end of the tunnel. Barely started, this month of February announces another bad news. This is the declaration of bankruptcy of its holding company Emergent Fidelity Technologies Ltd.

Sam Bankman-Fried’s Emergent Fidelity files for bankruptcy

Emergent Fidelity is the company through which SBF held stakes in Robinhood. During his time at the helm of FTX, he intentionally and unwittingly dipped into funds from Alameda Research. Their origin was only revealed after the November 2022 scandal.

Unfortunately, the United States Department of Justice (DoJ) has decided to seize the shares of Emergent Fidelity, worth $460 million (or 56 million or 7.41% of the shares of Robinhood Markets), there is a month of that.

Friday, February 3, Bloomberg reported that Emergent Fidelity Technologies filed for Chapter 11 bankruptcy protection on the same day. This statement follows the aforementioned seizure of its shares in Robinhood. And also a lawsuit filed by BlockFi last November. This case concerns an unfulfilled guarantee promise and a desire to recover the shares held by Emergent Fidelity.

Is it a reasonable choice?

Angela Barkhouse, one of Emergent Fidelity’s court-appointed liquidators in Antigua, said:

[Ils ont] the duty to the debtor’s creditors, whoever they may be…Given the many parties who claim to be creditors or outright owners of the debtor’s assets in proceedings in the United States, JPL believes that Chapter 11 protection is the only practical way to empower the debtor to to defend, to defend the assets and interests of its creditors in the United States “.

But SBF’s desire to take over what remains of FTX’s holdings, or its hidden treasures, has observers worried. Note also that he owns 90% of Emergent Fidelity. While the remaining 10% of the company’s shares go to Gary Wang. Aside from the stakes in Robinhood, their holding company only had $20 million in cash when it was seized on January 6.

It should also be noted that the criminal trial of SBF will begin next October. The case regarding Emergent Fidelity has been assigned case number 23-10149 in the United States Bankruptcy Court for the District of Delaware.

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