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Sam Bankman-Fried’s Robinhood shares have been seized by the Justice Department in FTX case

sam bankman fried courtSam Bankman-Fried.

REUTERS/Andrew Kelly

  • The Department of Justice has seized $450 million worth of Robinhood shares held by Sam Bankman-Fried and Gary Wang. 
  • Court documents said the shares “constitute property involved in violations.”
  • FTX, BlockFi and Bankman-Fried have been locked in a dispute over ownership of the funds. 

The Department of Justice seized over $450 million worth of Robinhood stock owned by FTX cofounders Sam Bankman-Fried and Gary Wang.

The roughly 55 million shares are owned by the two via a holding company, and have been the focus of an ownership dispute.

In a recent court filing, the Justice Department said the Robinhood shares “constitute property involved in violations” such as money laundering and wire fraud. Bankman-Fried pleaded not guilty last week to fraud charges related to the collapse of FTX.

Bankman-Fried, FTX’s new bosses, BlockFi and FTX creditor Yonatan Ben Shimon have all laid claim to the Robinhood stake, per a December 22 court filing.

BlockFi, which is also in the middle of its own bankruptcy case, is arguing that the Robinhood stock should be in their possession. BlockFi sued Bankman-Fried for the Robinhood shares in November, saying a $1 billion pledge by Alameda Research to secure loan obligations included the stake. 

DOJ officials warned last week that the stock could be seized, after FTX asked a judge last month the freeze the assets while the dispute could be sorted. Sam Bankman-Fried objected to the motion. 

SBF and Wang acquired the shares through a holding company, Emergent Fidelity Technologies, using funds borrowed from Alameda Research. SBF owns 90% of Emergent while Wang owns 10%. Bankman-Fried also argued that both Emergent and FTX maintained similar interests to plead his case toward ownership. 

SBF said in a filing last week that he needs them to help pay his legal fees.

Read the original article on Business Insider