The Feds have taken control of the 56 million shares of the trading app Bankman-Fried bought in May, saying it is not the property of the FTX bankruptcy estate.
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In a sign that the fight for control of the bankrupt FTX exchange's assets is escalating, the U.S. Justice Department has seized 56 million shares of stock-and-crypto trading app Robinhood that Sam Bankman-Fried purchased in May.
U.S. Attorney Seth Shapiro informed the Delaware bankruptcy court overseeing the looted exchange's case that federal prosecutors do not believe the stock, worth $456 million, is the property of the bankruptcy estate. Instead, Shapiro said it may be subject to a forfeiture hearing, Reuters reported.
Shapiro also noted that the Justice Department has seized bank accounts from two crypto-focused banks: Silvergate Bank and Moonstone Bank. These funds were associated with FTX Digital Markets, the Bahamian branch of the exchange.
Not So Merry
In addition, Bahamian liquidators working for the SCB have laid claim to them, as has the current leadership of the FTX Group overseeing the estate of Bankman-Fried's empire, including FTX, FTX US, Alameda and some 100 smaller companies formed for a variety of purposes.
One of those, Emergent, was created by Bankman-Fried and Wang to borrow $456 million from Alameda for the purpose of buying the Robinhood shares.
"The seizures that have taken place were ordered by the court in connection with the criminal actions in the Southern District of New York with respect to Mr. Bankman, Miss Ellison and Mr. Wang," FTX lawyer James Bromley said on Wednesday.
While reserving the company's rights with respect to the seized assets, Bromley told the court it wanted to be clear that the Robinhood shares in question "were being seized from accounts that are not currently under the control of the debtors."