The US government has seized – or is about to seize – hundreds of millions of dollars in Robinhood Markets Inc. shares as part of the case against FTX founder Sam Bankman-Fried, lawyers said in court Wednesday.
According to a Reuters report from January 4, US officials told a judge that they were in the process of seizing assets related to FTX and its former CEO, Sam Bankman-Fried, including 56 million shares of Robinhood, which is worth approximately $468 million at the time of publication.
FTX, which declared bankruptcy on November 11, has asked a federal court to rule on the ownership of the $450 million in Robinhood shares. Control of the Robinhood shares has been contested amid FTX’s bankruptcy proceedings, as many investors and creditors seek to be made whole. The assets have been claimed by BlockFi, Bankman-Fried, and FTX creditor Yonathan Ben Shimon.
A court hearing will eventually be held to determine what happens to the shares and assets seized from the bank accounts, according to Seth B. Shapiro, a lawyer with the United States Department of Justice, during a video court hearing in Wilmington, Delaware. One of the motions was “related to Robinhood shares, which the federal government has also seized,” according to Shapiro.
Shapiro stated that assets had been seized or were in the process of being seized from a number of banks, mentioning the name Silvergate, a lender closely linked to FTX and that they could be subject to civil or criminal forfeiture proceedings, a process designed to prevent criminals from profiting from the proceeds of crime.
According to James Bromley, a lawyer leading the main FTX insolvency proceeding in the US, the government is also seizing assets in bank accounts that were part of a bankruptcy case involving one unit of the FTX empire in the Bahamas.
On January 3, Bankman-Fried pleaded not guilty in federal court to eight criminal counts, including wire fraud, securities fraud, and violations of campaign finance laws. He also previously denied transferring funds from Alameda, claiming that he no longer had access to the wallets after stepping down as CEO in November.
