US DoJ Is Seizing Banking Assets, Robinhood Shares Linked to FTX, Court Told
Officials may later seek to have Sam Bankman-Fried forfeit the assets, potentially including as much as $450 million in stocks, to avoid benefiting from crimes
The U.S. Federal government has seized or is in the process of seizing a number of assets potentially linked to bankrupt crypto company FTX, including a number of shares in trading app Robinhood, officials have told a virtual court hearing in Delaware.
The assets could later be subject to forfeiture proceedings, as Department of Justice cases against FTX’s former chief Sam Bankman-Fried and senior executives Gary Wang and Carolyn Ellison continue.
FTX, which filed for bankruptcy Nov. 11, has asked a federal court to weigh in on the ownership of about $450 million worth of Robinhood shares. The shares' ownership is disputed between bankrupt crypto lender BlockFi, Bankman-Fried, and FTX creditor Yonathan Ben Shimon.
One of the motions put forward was “related to Robinhood shares, which the federal government has also seized,” Department of Justice counsel Seth Shapiro told a Delaware bankruptcy court Wednesday.
“We believe that these assets are not property in the bankruptcy estate” or are subject to exemptions, meaning they don't have to be frozen like most FTX assets are, pending wind-up, Shapiro told Judge John Dorsey.
Shapiro said assets had been seized or were in the process of being seized from a number of banks, mentioning the name Silvergate, a lender closely tied to FTX, and could be later subject to civil or criminal forfeiture proceedings, a process to stop criminals benefiting from the proceeds of crime.
A Sullivan and Cromwell attorney appearing on a screen labeled Brian Glueckstein, who represents FTX, later said he wanted to clarify that these seizures were tied to the Department of Justice's ongoing prosecution of Bankman-Fried, rather than FTX's bankruptcy case as a civil matter.
On Tuesday Bankman-Fried pleaded not guilty to a range of DoJ charges including money laundering and wire fraud.
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