Bankrupt crypto lender BlockFi has asked the court to dismiss a bankruptcy case filed by Sam Bankman-Fried’s (SBF) Emergent Technology company over a tussle to control 55 million Robinhood shares.
Disgraced FTX founder SBF owned 90% of shares in Emergent Technology — a company he co-founded with Gary Wang solely to purchase Robinhood shares.
SBF reportedly used the Robinhood shares to secure a $600 million loan from BlockFi. Following FTX’s collapse, the Robinhood shares — worth $455 million — were seized by the U.S. government.
Emergent Technology filed for bankruptcy on Feb. 3, claiming that the 55 million Robinhood shares pledged to BlockFi belonged to its estate.
However, BlockFi filed a counter-motion on Feb. 16, arguing that Emergent’s bankruptcy case was futile.
BlockFi argued that Emergent is ineligible for bankruptcy protection under the bankruptcy code because it has no property in the United States.
“Emergent has no employees, no income, and no business; its sole assets were shares in Robinhood Markets Inc.”
BlockFi claimed that Emergent’s bankruptcy case was engineered to enrich its joint provisional liquidators — Angela Barkhouse and Toni Shukla — who are seeking to take over the Robinhood shares.
BlockFi has asked the U.S. bankruptcy court to dismiss Emergent’s bankruptcy case given that the company has no property to qualify for bankruptcy protection.