The U.S. Division of Justice (DOJ) is within the technique of seizing Robinhood shares, price about $460 million, which are linked to former FTX CEO Sam Bankman-Fried (SBF). “We imagine that these property will not be 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 technique of seizing 56 million shares of Robinhood Markets Inc. (Nasdaq: HOOD), price about $460 million, which are 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 Decide John Dorsey, who oversees the FTX chapter case:
We imagine that these property will not be property of the chapter property or that they fall throughout the exceptions … of chapter code.
Based on 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 chapter in November final yr.
As a consequence 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 property frozen till the courtroom “can resolve the problems in a fashion that’s truthful 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 definitely imagine we’ve got rights with respect to these property … We’re in alignment at the moment with the U.S. authorities and the regulation enforcement officers in taking these steps.
Bromley careworn 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 expenses.
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