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BlockFi Sues Sam Bankman-Fried’s Emergent Fidelity Technologies

BlockFi Sues Sam Bankman-Fried’s Emergent Fidelity Technologies

Just hours after filing for bankruptcy, BlockFi sued Sam Bankman-Fried’s holding company.

BlockFi, a digital asset lender established in 2017 by Zac Prince and Flori Marquez, has sued Sam Bankman-Fried’s holding company Emergent Fidelity Technologies.

According to the news report shared by Financial Times, BlockFi aims to obtain Sam Bankman-Fried’s Robinhood shares that the FTX co-founder allegedly pledged as collateral at the beginning of November.

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In the filing, the crypto lender notes that on November 9th, Emergent Fidelity Technologies agreed to repay the company obligations made by FTX-related hedge fund Alameda Research Ltd.

Therefore, in the lawsuit, BlockFi claims that Emergent defaulted its obligations under the November 9th agreement. As a result, BlockFi is asking the court to seize 7.6% of Robinhood shares acquired by Sam Bankman-Fried.

It is worth noting that the lawsuit was filed on November 28th to the United States Bankruptcy Court for the District of New Jersey, the same court the company filed for bankruptcy.

After almost two weeks of allegations that crypto lender BlockFi is preparing to file for Chapter 11 bankruptcy, the news turned out to be true.

On November 28th, BlockFi announced that the company and eight affiliated companies filed for bankruptcy protection. With the filing BlockFi aims to “stabilize its business” and create “a comprehensive restructuring transaction that maximizes value for all clients and other stakeholders.”

Nevertheless, in the bankruptcy filing, BlockFi noted that it hopes to recover “all obligations owed to BlockFi” by FTX and its subsidiaries. Therefore, it can be assumed that the lawsuit is a part of the company's attempt to recover its funds.

On November 11th, the crypto world was shaken by the news that one of the largest crypto exchanges, FTX, led by its co-founder and CEO, Sam Bankman-Fried, has filed for bankruptcy. The aftermath of FTX’s collapse resulted in other crypto companies standing on the verge of the bankruptcy filing and the values of cryptocurrencies dropping daily.


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