US DOJ Seizes $450 Million in Robinhood Shares Linked to FTX

    US Department of Justice has confiscated $450 million in Robinhood shares that were purchased by former CEO Sam Bankman-Fried in mid-2022.

    According to the Bankruptcy Court of Delaware, which handles the collapse of the FTX, the US Department of Justice decided to seize $ 450 million in disputed shares between FTX and other companies.

    The seizure order was issued by the New York court, which is handling the US Department of Justice’s fraud charges against former FTX CEO Sam Bankman-Fried, as evidence for the investigation. Bankman-Fried on January 4 plead not guilty and determined to fight legally with the US government.

    The seized Robinhood assets are from accounts that the FTX debtors do not control, said James Bromley, a lawyer for the troubled crypto exchange. He stressed that the owner of the Robinhood shares was unclear even before the seizure began, pointing to proceedings underway in Antigua and Barbuda that are linked to the assets.

    “The ownership of those Robinhood shares was an open question before the seizure took place,” Bromley said. “Those shares were already at issue.”

    As reported, the above 56 million Robinhood shares (worth $450 million) have been disputed by many parties, including:

    – FTX exchange, which believes that Sam Bankman-Fried used FTX user assets to buy shares.

    – Lending company BlockFi, which said that Sam Bankman-Fried used these shares as collateral for a loan at BlockFi and is now bankrupt.

    – Emergent Fidelity Technologies, a subsidiary created by Sam Bankman-Fried to carry out the share purchase.

    – Sam Bankman-Fried personally, who holds the documents of the share purchase.

    It is not surprising that everyone wants to own these shares as they are the only high-liquid asset held by FTX/Alameda, which can be easily converted to cash.

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