FTX Founder’s Holding Firm Files for Bankruptcy
- FTX founder Sam Bankman-Fried’s holding company, Emergent Fidelity Technologies, has filed for bankruptcy.
- Emergent Fidelity Technologies that owns over 55 million Robinhood shares, which are worth more than $550 million.
- SBF owns close to 90% of the holding company, while FTX co-founder Gary Wang owns the remaining 10%.
- The holding company filed for bankruptcy in the same court as FTX to pursue a “form of joint administration” between the two bankruptcies.
The bearish rhythm initiated by the collapse of the former multi-billion dollar crypto exchange, FTX, currently resonates throughout the world, despite the crypto market’s recent recovery from its adverse effects in the recent period. Interestingly, the holding company of the exchange’s founder, Sam Bankman-Fried, also known as Emergent Fidelity Technologies, has filed for bankruptcy.
According to a report from Bloomberg, the Antigua and Barbuda-based company filed for bankruptcy on Friday, joining the 130+ companies associated with FTX that have issued similar filings. Moreover, it is also crucial to note that it is Emergent Fidelity Technologies that owns over 55 million Robinhood shares, which are worth more than $550 million and are a crucial part of the exchange’s bankruptcy process.
Furthermore, Emergent Fidelity Technologies submitted a voluntary petition to declare bankruptcy under a Chapter 11 filing in the United States Bankruptcy Court for the District of Delaware and is already a target of the lawsuit filed by crypto lender BlockFi in November regarding the ownership of the Robinhood shares.
Interestingly, the Department of Justice (DoJ) currently has control over the Robinhood shares that are currently worth $590 million at the time of publication and might be worth a lot more if the global macroeconomic situation improves in the coming days. These shares have been a point of contention among BlockFi, FTX creditor Yonathan Ben Shimon, and Bankman-Fried himself.
The DoJ seized around 55,273,469 shares of Robinhood (HOOD) along with $20 million in cash from Emergent Fidelity Technologies, which were cited as the “only known assets” belonging to the holding company. Prior to the seizure by the DoJ, these shares were held by brokerage firm ED&F Man Capital Markets.
A court filing on January 6 said that the “indictment includes forfeiture allegations, seeking to forfeit property that constitutes or was derived from proceeds traceable to the conspiracy to commit wire fraud and property involved in the conspiracy to commit money laundering.”
As reported by Bitnation in an earlier report, Sam Bankman-Fried’s lawyers have submitted a plea to keep his 56 million shares of the Robinhood trading app reversing the DoJ’s decision to seize the same. The lawyers claim that SBF has “not been found criminally or civilly liable for fraud, and it is improper for FTX debtors to ask the Court to simply assume that everything Mr. Bankman-Fried ever touched is presumptively fraudulent.”
It was also revealed by Angela Barkhouse, one of the Joint Provisional Liquidators in the case, that the holding company filed for bankruptcy in the same court as FTX to pursue a “form of joint administration” between the two bankruptcies.
“The [Joint Provisional Liquidators’] duties are to the Debtor’s creditors, whoever those creditors may be,” said Barkhouse. “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.”
Barkhouse also added that SBF owns close to 90% of the holding company, while co-founder Gary Wang owns the remaining 10%.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
