Crypto lender BlockFi Inc. has asked for a court ruling stripping Sam Bankman-Fried ‘s offshore investment vehicle of the protections of chapter 11, citing the recent seizure of its assets by federal prosecutors, WSJ Pro Bankruptcy reported. BlockFi, itself bankrupt since November, sought Thursday to dismiss the bankruptcy case of Emergent Fidelity Technologies Ltd., the offshore investment vehicle that Mr. Bankman-Fried used to purchase a 7.6% stake in Robinhood Markets Inc. The chapter 11 case serves little purpose and was only filed to undermine BlockFi’s claim to the Robinhood shares, according to BlockFi’s motion in the U.S. Bankruptcy Court in Wilmington, Del. Court-appointed liquidators in Antigua and Barbuda, where Emergent is based, placed it under chapter 11 earlier this month after federal prosecutors seized its Robinhood stake and cash holdings. BlockFi said in its filing that Emergent has no property to administer that would qualify it for chapter 11 and only filed bankruptcy as a litigation tactic. BlockFi has staked a claim to the Robinhood shares as collateral for $600 million in loans it made to Mr. Bankman-Fried’s crypto trading firm Alameda Research. The new management team guiding FTX and Alameda through their own chapter 11 cases has also claimed an interest in Emergent’s assets, which now sit in a government-controlled account.
