Sam Bankman-Fried’s holding company, Emergent Fidelity Technologies, has filed for bankruptcy protection.
Emergent Fidelity Technologies voluntarily filed for bankruptcy under Chapter 11 in the United States Bankruptcy Court for the District of Delaware, according to court documents filed on February 3.
BlockFi, a cryptocurrency lending startup, has already sued the business in November over the whereabouts of over 55 million Robinhood shares.
BlockFi, FTX creditor Yonathan Ben Shimon, and Bankman-Fried himself have all disagreed on the Robinhood shares, which are currently valued at more than $590 million.
The Justice Department took the shares and almost $20 million in US currency as part of the action against FTX and its officers, the department said on Jan. 6.
The shares and the $20 million, which brokerage company Marex Capital Markets formerly owned prior to the DOJ seizure, were listed as Emergent Fidelity Technologies’ “sole known assets.“
In order to seek a “kind of combined administration” between the two bankruptcies, Emergent Fidelity Technologies filed for Chapter 11 in the same court as FTX, according to a declaration made by Angela Barkhouse, one of the Joint Provisional Liquidators in the case.
“The [Joint Provisional Liquidators’] duties are to the Debtor’s creditors, whoever those creditors may be. Given the many parties claiming to be creditors or outright owners of the [Robinhood shares] in proceedings in the U.S., the JPLs believe that chapter 11 protection is the only practical way to empower the Debtor to defend itself, the Assets, and its creditors’ interests in the U.S,” said Barkhouse.
Barkhouse claims that Bankman-Fried controls 90% of the business, with the co-founder of FTX Gary Wang owning the other 10%. Wang has already entered a guilty plea to fraud-related charges, while Bankman-Fried’s criminal trial is set to start in October.