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The U.S. Division of Justice (DOJ) is within the means of seizing Robinhood shares, value about $460 million, which might be linked to former FTX CEO Sam Bankman-Fried (SBF). “We imagine that these property are usually not property of the chapter property or that they fall inside the exceptions … of chapter code,” a DOJ lawyer advised the decide 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 might 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 advised Choose John Dorsey, who oversees the FTX chapter case:
We imagine that these property are usually not property of the chapter property or that they fall inside the exceptions … of chapter code.
In keeping with Robinhood’s submitting with the Securities and Change Fee (SEC) in Could final 12 months, 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 12 months.
Attributable to 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 property frozen till the court docket “can resolve the problems in a way 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 happened.” He added:
We definitely imagine we’ve got rights with respect to these property … We’re in alignment this present day with the U.S. authorities and the regulation enforcement officers in taking these steps.
Bromley pressured 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 responsible to all fees.
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