US Government seizes Robinhood shares linked to Sam Bankman-Fried

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US Government seizes Robinhood shares linked to Sam Bankman-Fried
US Government seizes Robinhood shares linked to Sam Bankman-Fried

The US Government is in the process of seizing 56 million shares of Robinhood Markets Inc. worth about $460 million, which are tied to the disgraced founder of FTX, Sam Bankman-Fried.

The claim is made by Seth Shapiro, a US Department of Justice (DOJ) attorney at a hearing in the FTX bankruptcy court in Delaware. And he declared: “We believe these assets are not owned by the bankruptcy estate or fall within the exceptions to the bankruptcy code.”

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According to Robinhood’s filing with the Securities and Exchange Commission (SEC) in May of last year, Emergent Fidelity Technologies had a 7.6% stake in Robinhoody Bankman-Fried was its sole director and majority owner.

Following FTX’s bankruptcy filing, ownership of Robinhood shares is being disputed by FTX’s new management, Bankman-Fried, an individual creditor of FTX, and cryptocurrency lender Blockfi, which also filed for bankruptcy in November of the year. past.

Due to multiple parties claiming Robinhood’s actions, FTX’s new management has filed a motion with the Delaware bankruptcy court to hold the assets frozen until the court “can resolve the issues in a way that is fair to all of the debtors’ creditors.”

FTX’s attorney, James Bromley, stated that: “The question of ownership of those Robinhood shares was an open question before the embargo took place.” And added: “We certainly believe that we have rights with respect to those assets… We are currently in agreement with the US government and law enforcement officials in taking these actions.”

Bromley stressed that the Robinhood shares seized by federal prosecutors came from accounts not currently under the direct control of bankrupt FTX.

The DOJ and multiple US regulators, including the SEC, have indicted Bankman-Fried on multiple counts of fraud. However, the former FTX CEO has pleaded not guilty to all charges.

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