The U.S. Division of Justice (DOJ) is within the strategy of seizing Robinhood shares, value about $460 million, which might be linked to former FTX CEO Sam Bankman-Fried (SBF). “We imagine that these belongings usually are not property of the chapter property or that they fall throughout the exceptions … of chapter code,” a DOJ legal professional instructed the choose overseeing the FTX chapter case.
DOJ Seizing Robinhood Shares Linked to FTX
The U.S. authorities is within the strategy of seizing 56 million shares of Robinhood Markets Inc. (Nasdaq: HOOD), value about $460 million, which might be linked to the disgraced FTX founder Sam Bankman-Fried (SBF), mentioned Seth Shapiro, an legal professional with the U.S. Division of Justice (DOJ) at an FTX chapter courtroom listening to in Delaware Wednesday.
Shapiro instructed Choose John Dorsey, who oversees the FTX chapter case:
We imagine that these belongings usually are not property of the chapter property or that they fall throughout the exceptions … of chapter code.
In keeping with Robinhood’s submitting with the Securities and Trade Fee (SEC) in Might 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 bankruptcy in November final yr.
As a result of a number of events laying claims to the Robinhood shares, the brand new FTX administration has filed a movement to the Delaware chapter courtroom to maintain the belongings frozen till the courtroom “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 came about.” He added:
We actually imagine now we have rights with respect to these belongings … We’re in alignment these days with the U.S. authorities and the legislation enforcement officers in taking these steps.
Bromley burdened that the Robinhood shares being seized by Federal prosecutors are from accounts that aren’t at the moment 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. Nevertheless, the previous FTX CEO has pleaded not guilty to all fees.
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