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.
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.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.