The Justice Department seized Robinhood shares and more than $20 million in U.S. currency as part of the criminal case against SBF.
In connection with the criminal investigations into the leaders of the cryptocurrency exchange FTX, the US Department of Justice has formally notified the court overseeing BlockFi’s bankruptcy that it has seized assets. The stock was worth more than $450 million at the time of publication. On January 6, the Justice Department announced that it had seized 55,273,469 shares of Robinhood from former FTX CEO Sam Bankman-Fried, BlockFi, and FTX creditor Yonathan Ben Shimon.
According to the DOJ, it also seized more than $20 million in US cash from the brokerage ED&F Man Capital Markets. According to reports from January 4, the Justice Department was reportedly in the process of taking the shares of Robinhood as part of the action against FTX.
The DOJ stated on January 5 that the shares would be seized, but Bankman-legal Fried’s team maintained that the former FTX CEO had a right to the assets “to pay for his criminal defense.”
“The charges in the Indictment arise from an alleged wide-ranging scheme by the defendant to misappropriate billions of dollars of customer funds deposited onto FTX, the international cryptocurrency exchange founded by Bankman-Fried,” said the court filing. “The Indictment includes forfeiture allegations, seeking to forfeit property that constitutes or was derived from proceeds traceable to the conspiracy to commit wire fraud, wire fraud, and property involved in the conspiracy to commit money laundering.”
In December, after being detained in the Bahamas and extradited to the US, Bankman-Fried entered a not guilty plea to eight felony charges, including wire fraud and breaking campaign financing regulations.
Gary Wang, a co-founder of FTX, and former CEO of Alameda Research Caroline Ellison have previously admitted guilt on associated counts. The criminal prosecution for SBF is set to start in October.
Separate from the criminal prosecutions, FTX is also going through bankruptcy proceedings; the subsequent open hearing is set for January 11. As many users try to reclaim stolen or lost monies, parties representing FTX debtors have also mentioned assets linked to the cryptocurrency exchange and its previous executives.
