The U.S. Department of Justice (DOJ) is within the technique of seizing Robinhood shares, price about $460 million, which can be linked to former FTX CEO Sam Bankman-Fried (SBF). “We believe that these assets are not property of the bankruptcy estate or that they fall within the exceptions … of bankruptcy code,” a DOJ legal professional advised the decide 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 can be linked to the disgraced FTX founder Sam Bankman-Fried (SBF), stated Seth Shapiro, an legal professional with the U.S. Department of Justice (DOJ) at an FTX chapter court docket listening to in Delaware Wednesday.
Shapiro advised Judge John Dorsey, who oversees the FTX chapter case:
We consider that these property aren’t property of the chapter property or that they fall throughout the exceptions … of chapter code.
According to Robinhood’s submitting with the Securities and Exchange Commission (SEC) in May final yr, Emergent Fidelity Technologies 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.
Due 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 preserve the property frozen till the court docket “can resolve the issues in a manner that is fair to all creditors of the debtors.”
FTX lawyer James Bromley stated throughout Wednesday’s listening to: “The question as to the ownership of those Robinhood shares was an open question before the seizure took place.” He added:
We definitely consider we’ve got rights with respect to these property … We are in alignment at the moment with the U.S. authorities and the legislation enforcement officers in taking these steps.
Bromley pressured 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. However, the previous FTX CEO has pleaded not responsible to all prices.
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