BlockFi: Dispute Over Robinhood Shares Continues

BlockFi has requested the annulment of Emergent Fidelity's bankruptcy and is standing by its ownership claims.

BlockFi has filed a motion with the Delaware bankruptcy court to reject Emergent Fidelity's bankruptcy plan. Emergent Fidelity Technologies is a holding controlled by Sam Bankman-Fried, based on the Caribbean island of Antigua.

Before the seizure by the tax authorities, the company owned about 55 million shares in the financial services firm Robinhood. The equivalent value at the time of writing was about $550 million.

The seizure of Emergent Fidelity's assets followed the collapse of the crypto exchange FTX. Now several parties are simultaneously claiming ownership of the shares, including BlockFi.

"Emergent pledged the shares and their proceeds as collateral to secure repayment of more than $600 million in loans to BlockFi and failed to do so," BlockFi said.

Further, the company contends: "The bankruptcy petition filed on February 3 was not made in good faith. The company is not eligible because it has no employees, no income, and no business."

It says the case "exists solely" to advance the interests of the Antigua bankruptcy trustees, who are reportedly already owed more than $1.7 million in fees.

Sam Bankman-Fried owns 90 percent of Emergent Fidelity's shares. The remaining 10 percent is in Gary Wang's hands. The latter has agreed to a settlement, while Bankman-Fried pleaded not guilty.