U.S. Prosecutors Seize Robinhood Shares Worth $460 Million Related to FTX
U.S. prosecutors move to seize $460 million worth of Robinhood Markets Inc. shares linked to Sam Bankman-Fried.
U.S. Department of Justice (DOJ) counsel, Seth Shapiro, told the Delaware Bankruptcy Court hearing that the DOJ does not believe the shares are part of the company’s assets in the context of the forfeiture proceeding.
Bankman-Fried, the founder of the now-bankrupt FTX crypto exchange, and the company’s co-founder, Gary Wang, formed a holding company in May 2022 called Emergent Fidelity Technologies Ltd. The goal was to buy 56 million shares of Robinhood with $546 million in loans from Alameda Research.
Bankrupt crypto lender BlockFi, FTX creditor Yonatan Ben Shimon and Bankman-Fried have filed lawsuits in an attempt to gain control of the shares. In late December, FTX’s lawyers asked that the shares remain frozen while legal proceedings continue.
On December 13, FTX’s new CEO, John J. Ray III, told Congress that the crypto exchange had lost $8 billion in customer deposits and that Bankman-Fried and select company executives had access to customer funds.
Bankman-Fried was released on bail and faces charges of bank and wire fraud, money laundering and conspiracy, and is facing serious prison time.
Gary Wang and Carolyn Ellison (former head of Alameda Research) have accepted plea agreements and reduced sentences, saying they are aware of some of the crimes committed.