The aftermath of the FTX scandal involving Sam “SBF” Bankman-Fried, its creator and ex-CEO, is still unfolding. Per reports, BlockFi, a bankrupt cryptocurrency lending firm, has requested the United States Bankruptcy Court in Wilmington to remove the Chapter 11 bankruptcy protections from Sam Bankman-Fried’s offshore investment entity.
BlockFi’s Assertion Is Baseless – Quantuma Director
According to BlockFi, the bankruptcy status of Emergent Fidelity Technologies Ltd. serves little purpose and was only filed to weaken BlockFi’s claim to Robinhood shares. Notably, Bankman-Fried bought shares in Robinhood through Emergent Fidelity.
Despite this, the spokesperson for Emergent’s liquidator, Quantuma, has stated that the reason for filing bankruptcy was to safeguard the rights of Emergent’s creditors, regardless of their identity. According to Toni Shukla (the director of Quantuma), numerous lawsuits are ongoing in the United States, with multiple parties asserting their status as creditors or even the outright owners of Emergent’s assets.
“Liquidators believe the most feasible course of action to enable Emergent to protect itself, the interests of its creditors, and its assets in the United States is to seek Chapter 11 protection,” Shukla said. The Quantuma CEO provided an affidavit stating that, apart from the shares, Emergent does not possess any significant assets, as the prosecutors have already seized $20.7 million in cash.
She added that BlockFi’s assertion that fees drove the filing for bankruptcy is unfounded and inaccurate. Robinhood earlier stated its desire to repurchase the shares.
However, the crypto lender acknowledged that such as move would not be possible. BlockFi applied for Chapter 11 bankruptcy on November 28th, 2022, due to the contagion that spread following the FTX debacle, which occurred earlier that month.
Court Document Reveals SBF’s Unknown Guarantors
In December, FTX requested the bankruptcy judge to prevent BlockFi from claiming Robinhood shares worth almost $450 million. Sam Bankman-Fried bought the shares in May 2022.
The judge contemplated moving the Robinhood shares, which BlockFi and FTX laid claims to either an escrow account or a neutral broker while the courts determined the rightful owner. Earlier in February, several news outlets requested that the identities of the guarantors standing as sureties for SBF’s $250 million bond be made public.
On February 15th, court documents were released revealing the identities of the two individuals. Both individuals are prominent individuals at Stanford University.
They include Larry Kramer, Stanford Law School’s former dean, and Andreas Paepcke, a senior researcher working at Stanford University. Larry Kramer and Andreas Paepcke stood as sureties for SBF’s bail on January 25th, with amounts of $500,000 and $200,000, respectively.
Meanwhile, other members of the sureties include Bankman-Fried’s parents, Barbara Fried and Joseph Bankman. Notably, both individuals were also law professors who worked at Stanford.
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