US authorities seize $460 million in Robinhood stocks because of this


Most read

Loading Most Ready posts..


In a large operation to root out criminal activity, the United States government has reportedly taken possession of Robinhood stocks worth more than $460 million connected to the defunct cryptocurrency exchange FTX. 

This step was made in an attempt to safeguard the interests of stock market investors and maintain the reliability of the stock and crypto market.

As the actions brought by the Department of Justice against the former chief executive of FTX, Sam Bankman-Fried, as well as senior executives Gary Wang and Carolyn Ellison, continue, the assets may be subject to eventual forfeiture procedures.

He also denied transferring cash from Alameda in the past, stating that he no longer had access to the wallets after resigning as CEO in November.

According to the counsel for the Department of Justice, Seth Shapiro, they think that these investments are not collateral in the bankruptcy estate or are subject to exemptions, which means that they do not have to be frozen as the majority of FTX’s assets are in preparation for the wind-up.

Shapiro said that assets had been confiscated or are currently in the middle of being detained from a number of institutions, referencing the name Silvergate, a lender that is intimately related to FTX, and that these assets might subsequently be subject to civil or criminal forfeiture procedures, which is a mechanism to prevent criminals from profiting from the profits of crime.

FTX, which submitted its petition for bankruptcy on November 11, has requested that a federal court rule on the ownership of about 450 million dollars worth of Robinhood shares.

Another insolvent cryptocurrency lender BlockFi, Bankman-Fried, and FTX creditor Yonathan Ben Shimon are at odds with one another about who owns the shares in question.

There was a competition among participants to win the 56 million Robinhood shares. BlockFi said that they are entitled to the shares as a result of a transaction that took place in November with Bankman-Fried.

Their argument was that the shares had been pledged as security for a loan that Alameda Research had provided. None of them won, clearly.

Sam Bankman-Fried pleaded not guilty

This development comes after Bankman-Fried entered a not-guilty plea in a federal court on January 3, 2023, regarding the eight criminal counts against her. These charges include wire fraud, securities fraud, and breaches of campaign finance regulations.

Sam Bankman-Fried is now participating in what has been one of the most publicized legal proceedings in the history of crypto. 

Prosecutors have mentioned the present situation about the widely known Robinhood shares that were bought by the former CEO with the assistance of a loan from Alameda Research at a hearing that is taking place on Jan. 5.

It was just a few weeks ago that it became public knowledge thanks to an affidavit presented to a court in the Caribbean that Bankman-Fried and Gary Wang had taken out significant loans from Alameda Research.

According to a Coindesk report, the two invested the money in Emergent Fidelity Technologies LTD., a shell company that acquired a 7.6 percent share in Robinhood in May last year.

Share link:

Jai Hamid

Jai Hamid is a passionate writer with a keen interest in blockchain technology, the global economy, and literature. She dedicates most of her time to exploring the transformative potential of crypto and the dynamics of worldwide economic trends.

Stay on top of crypto news, get daily updates in your inbox

Related News

Subscribe to CryptoPolitan