DoJ to Seize $450 Million in Disputed Robinhood Shares
Reading Time: 2 minutesThe DoJ is currently in the process of seizing $450 million worth of Robinhood shares linked to FTX
BlockFi and FTX creditors both argue that the shares should be given to them
It was revealed in an FTX bankruptcy hearing yesterday that the DoJ is seeking to take custody while the legal battle is fought
The U.S. Department of Justice (DoJ) is currently in the process of seizing $450 million worth of Robinhood shares linked to FTX until it can be made clear who should rightfully have them. Seth Shapiro, senior trial counsel for the DoJ, yesterday revealed during an FTX bankruptcy hearing in Delaware that he wasn’t aware that the shares, which are owned by Emergent Fidelity Technologies, the personal investment vehicle of Sam Bankman-Fried, are also being sought by bankrupt BlockFi. This has left the DoJ with no choice but to seize them while the legal system works out how they should be divided up.
Legal Battle Between BlockFi and FTX Creditors
The fate of the Robinhood shares was one of the more left wing things to come out of the collapse of Blockfi. On the day it announced its own bankruptcy it also launched legal proceedings against Emergent, arguing that it should take custody of the shares, which Emergent bought in February, as compensation for Alameda Research, FTX’s trading arm, defaulting on $680 million of collateralized loans in early November.
Conversely, because Emergent is 90% owned by former FTX CEO Sam Bankman-Fried, FTX creditors have argued that the shares should be added to the kitty to be divided up between them. This impasse has led to the DoJ taking action to seize the shares while discussions over their eventual fate play out.
Bankman -Fried Tried to Sell Shares in November
The shares themselves were purchased for $648 million almost a year ago, and were listed as assets when Alameda was trying desperately to raise funds to save FTX in November. Bankman-Fried is alleged to have been privately attempting to sell the shares leading up to FTX’s bankruptcy filing on November 11, and has been accused of continuing to negotiate such sales even after entering into the pledge agreement, as late as November 10.
The post DoJ to Seize $450 Million in Disputed Robinhood Shares appeared first on FullyCrypto.
Filed under: Bitcoin - @ January 5, 2023 10:22 am