US Prosecutors To Seize $460M Robinhood Shares Linked To Bankrupt FTX

The US Department of Justice is moving forward to seize Robinhood shares worth over $460 million that were linked to SBF’s bankrupt crypto exchange FTX. Along with Robinhodd shares, the prosecutors are also seizing assets in bank accounts FTX held in the Bahamas.

Prosecutor Seth Shapiro declared in a hearing that the government is taking control of the shares and seizing assets in bank accounts FTX held in the Bahamas, reported Wall Street Journal.

Robinhood shares are down 13.55% in last 30 days.

What will happen To 56 million Robinhood shares?

The seizures are part of the DoJ’s criminal indictment against the former FTX chief Sam Bankman-Fried. It will be decided in the future hearing what the government plans to do with the approximately 56 million shares, Shapiro said. SBF has pleaded not-guilty this week in a US court against all the charges.

According to the SEC filing, SBF’s FTX had purchased around 7.6% shares of the famous online brokerage firm back in May last year. There were even talks of FTX completely acquiring Robinhood last year but it did not happen.

BlockFi, FTX customers claim rights on 56 Mln Robinhood shares

Crypto lending firm BlockFi that filed for bankruptcy in the aftermath of FTX collapse, claimed in its bankruptcy filing that the FTX owes them these 56 million Robinhood shares. According to BlockFi, SBF had promised to put these Robinhood shares as collateral in exchange for more than $600 million in loans to Alameda Research. SBF’s company had signed an agreement to bailout BlockFi for $240 million in July. But when FTX began to collapse, the crypto lending firm revealed it had significant exposure to FTX and filed for bankruptcy.

On the other hand, FTX customers have also filed a class-action lawsuit against the defunct crypto exchange, demanding that they should have the first right on whatever assets FTX has left, including 56 million Robinhood shares.

Jai Pratap is a Crypto and Blockchain enthusiast with over three years of working with different major media houses. His current role at Coingape includes creating high-impact web stories under tight deadlines. When not working, you’ll find him reading Russian literature or watching some Swedish movie.