Another company owned by disgraced cryptocurrency moghul Sam Bankman-Fried filed for bankruptcy on Friday, February 3. Emergent Fidelity Technologies, an offshore company that owns 55 million shares of stock and cryptocurrency trading entity Robinhood, failed to honour its financial obligations and thus filed for bankruptcy. The bankruptcy filing follows a tussle among stakeholders over who should get the stock following the collapse of FTX group.
The fate of Robinhood stake
The Robinhood stake is worth more than US$590 million at current market prices. It has been seized by the US government. However, its ultimate fate remains unclear. This is because a number of parties, including the US Justice Department, bankrupt cryptocurrency lender BlockFi, and Bankman-Fried are trying to take the shares.
According to papers filed in an Antigua court, Emergent Fidelity holds $20.7 million of cash but has no other assets. Sam Bankman-Fried owns 90 per cent of Emergent Fidelity but no longer controls it, as per the court papers. The rest of the 10 per cent in Emergent Fidelity is owned by FTX co-founder Gary Wang.
The liquidators, individuals responsible for winding up the affairs of a bankrupt entity, for Emergent Fidelity are appointed by an Antigua court.
US prosecutors go hard against Sam Bankman-Fried
Meanwhile, last week, the US prosecutors asked a judge in New York to impose tougher bail conditions on Sam Bankman-Fried, expressing concern that he might tamper with witnesses or destroy evidence in his criminal case. They also asked that Bankman-Fried not use Signal or other encrypted call and messaging applications.
Sam Bankman-Fried remains out on bail on a US$250 million bond. He is required to live with his parents since pleading not guilty to looting billions of dollars from the now-bankrupt cryptocurrency exchange front FTX.
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