The U.S. Division of Justice (DOJ) is within the means of seizing Robinhood shares, value about $460 million, which can be linked to former FTX CEO Sam Bankman-Fried (SBF). “We imagine that these belongings will not be property of the chapter property or that they fall inside the exceptions … of chapter code,” a DOJ lawyer instructed the choose overseeing the FTX chapter case.
DOJ Seizing Robinhood Shares Linked to FTX
The U.S. authorities is within the means of seizing 56 million shares of Robinhood Markets Inc. (Nasdaq: HOOD), value about $460 million, which can be linked to the disgraced FTX founder Sam Bankman-Fried (SBF), mentioned Seth Shapiro, an lawyer with the U.S. Division of Justice (DOJ) at an FTX chapter court docket listening to in Delaware Wednesday.
Shapiro instructed Decide John Dorsey, who oversees the FTX chapter case:
We imagine that these belongings will not be property of the chapter property or that they fall inside the exceptions … of chapter code.
In line with Robinhood’s submitting with the Securities and Alternate Fee (SEC) in Could final yr, Emergent Constancy Applied sciences took a 7.6% stake in Robinhood, and Bankman-Fried was its sole director and majority proprietor.
Following the FTX chapter submitting, the possession of the Robinhood shares is disputed by the brand new FTX administration, Bankman-Fried, a person FTX creditor, and crypto lender Blockfi which additionally filed for chapter in November final yr.
Resulting from a number of events laying claims to the Robinhood shares, the brand new FTX administration has filed a movement to the Delaware chapter court docket to maintain the belongings frozen till the court docket “can resolve the problems in a way that’s honest to all collectors of the debtors.”
FTX lawyer James Bromley mentioned throughout Wednesday’s listening to: “The query as to the possession of these Robinhood shares was an open query earlier than the seizure happened.” He added:
We actually imagine we’ve rights with respect to these belongings … We’re in alignment nowadays with the U.S. authorities and the regulation enforcement officers in taking these steps.
Bromley harassed that the Robinhood shares being seized by Federal prosecutors are from accounts that aren’t presently underneath the direct management of the bankrupt FTX.
The DOJ and a number of U.S. regulators, together with the SEC, have charged Bankman-Fried with a number of counts of fraud. Nonetheless, the previous FTX CEO has pleaded not responsible to all prices.
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