Retail trading giant Robinhood is rolling out its digital wallet to over 1 million waitlisted users after initially releasing the beta version to just 10,000 customers last September. The Robinhood Wallet is a standalone smartphone app that allows users to trade and transfer crypto assets as well as access decentralized apps (DApps) and store non-fungible […]
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Following the court filing that shows FTX co-founder Sam Bankman-Fried (SBF) wants access to FTX’s $460 million in Robinhood shares, Delaware bankruptcy court documents show tens of millions were spent by the FTX team in 2022 on living accommodations, hotels, food, and flights. Moreover, SBF’s quantitative trading firm allegedly owes more than $55,000 to Jimmy […]
The Justice Department said it had seized 55,273,469 shares of Robinhood and more than $20 million in U.S. currency as part of the criminal case against Sam Bankman-Fried.
The United States Department of Justice has officially notified the court handling the bankruptcy of BlockFi that it has seized assets in accordance with criminal cases against crypto exchange FTX and its executives.
In a Jan. 6 court filing, the Justice Department said it had seized 55,273,469 shares of Robinhood to which former FTX CEO Sam Bankman-Fried, BlockFi, and FTX creditor Yonathan Ben Shimon had made claims — worth more than $450 million at the time of publication. The DOJ noted it had also taken control of more than $20 million in U.S. currency from the brokerage firm ED&F Man Capital Markets.
Reports from Jan. 4 had suggested the the Justice Department was in the process of seizing the Robinhood shares as part of the case against FTX. Bankman-Fried’s legal team confirmed on Jan. 5 the DOJ had moved forward with seizing the shares, but still argued the former FTX CEO had a claim to the assets “to pay for his criminal defense”.
“The charges in the Indictment arise from an alleged wide-ranging scheme by the defendant to misappropriate billions of dollars of customer funds deposited onto FTX, the international cryptocurrency exchange founded by Bankman-Fried,” said the court filing. “The Indictment includes forfeiture allegations, seeking to forfeit property that constitutes or was derived from proceeds traceable to the conspiracy to commit wire fraud, wire fraud, and property involved in the conspiracy to commit money laundering.”
This story is developing and will be updated.
The U.S. Department of Justice (DOJ) has officially seized shares of popular trading app Robinhood linked to Sam Bankman-Fried despite objections from the disgraced FTX founder’s legal team. In a filing dated January 6th, prosecutors with the Commercial Litigation branch of the DOJ Civil Division inform the bankruptcy court in the district of New Jersey […]
The post DOJ Officially Seizes Over $456,000,000 Worth of Robinhood Shares Tied to FTX Founder Sam Bankman-Fried appeared first on The Daily Hodl.
Disgraced FTX founder Sam Bankman-Fried is fighting with FTX debtors over hundreds of millions of dollars worth of seized Robinhood shares. Court documents reveal that Bankman-Fried’s legal team says the shares are needed to fund the ex-billionaire’s defense while FTX debtors, such as crypto lender BlockFi, have filed a motion staking a claim to them […]
The post Sam Bankman-Fried Spars With FTX Debtors Over Seized Robinhood Shares Valued at Over $460,000,000 appeared first on The Daily Hodl.
The legal team confirmed the U.S. Departure of Justice was in the process of seizing the Robinhood shares, but said SBF was “compelled to reply” given other claims.
The legal team for former FTX chief executive officer Sam Bankman-Fried has filed a motion in an effort to stop the exchange’s debtors from controlling more than $450 million worth of shares of Robinhood.
In a Jan. 5 court filing regarding FTX’s bankruptcy case, Bankman-Fried’s lawyers said FTX debtors had “failed to carry their heavy burden” establishing that they had a legal claim to more than 56 million Robinhood shares. The legal team confirmed reports that the United States Departure of Justice was in the process of seizing the shares, but said SBF was “compelled to reply” given the stakes surrounding the assets.
“Mr. Bankman-Fried has not been found criminally or civilly liable for fraud, and it is improper for the FTX Debtors to ask the Court to simply assume that everything Mr. Bankman-Fried ever touched is presumptively fraudulent,” said the filing, referring to the Robinhood shares. “The FTX Debtors have not shown that they have a reasonable likelihood of succeeding on the merits of a fraudulent transfer claim.”
The court filing cited U.S. authorities’ criminal case against Bankman-Fried, in which he faces eight criminal counts including wire fraud and violations of campaign finance laws. According to his lawyers, SBF “requires some of these funds to pay for his criminal defense”. They cited case law in which withholding funds could “constitute irreparable harm” to one’s defense.
Bankman-Fried claimed in December — prior to his arrest in the Bahamas and extradition to the U.S. — that he had only had $100,000 left in his bank account. However, two individuals whose personal information has been redacted from public documents have also signed on to be sureties for his $250-million bond, along with his parents.
The former FTX CEO has pled not guilty to all charges and his trial is expected to begin in October. As a condition of his bail, a federal judge ordered Bankman-Fried not to access or transfer any cryptocurrency or assets from FTX or Alameda. On-chain data had suggested funds from Alameda wallets were being moved amid the court cases.
Related: FTX founder reportedly cashes out $684K after being released on bail
Though the U.S. Justice Departure may soon have control of all of the Robinhood shares, FTX, BlockFi, and Bankman-Fried have separately previously staked claims for different reasons. BlockFi filed a suit in November claiming the stocks were put up as collateral for the firm’s loans to Alameda Research, while FTX has argued the shares should be controlled by the firm while the bankruptcy case proceeds.
Officials reportedly told a bankruptcy judge they were in the process of seizing 56 million shares of Robinhood tied to FTX and its former CEO Sam Bankman-Fried.
The United States Departure of Justice has reportedly seized or was in the process of seizing more than $400 million worth of Robinhood shares linked to FTX as part of the case against the crypto exchange.
According to a Jan. 4 report from Reuters, U.S. officials told a judge they were in the process of seizing assets tied to FTX and its former CEO Sam Bankman-Fried, which included 56 million shares of Robinhood — worth roughly $468 million at the time of publication. The report followed a judge in the criminal case against SBF ordering him not to access or transfer any cryptocurrency or assets from FTX or Alameda.
Amid FTX’s bankruptcy proceedings, control of the Robinhood shares has been under contention as many investors and creditors look to be made whole. BlockFi, Bankman-Fried and FTX creditor Yonathan Ben Shimon have all staked claims to the assets.
In federal court on Jan. 3, Bankman-Fried pled not guilty to eight criminal counts including wire fraud, securities fraud and violations of campaign finance laws. He also previously denied moving funds from Alameda, saying he no longer had access to the wallets since stepping down as CEO in November.
Related: The outcome of SBF's prosecution could determine how the IRS treats your FTX losses
The former FTX CEO has been under house arrest at his parent’s home in California since December but has been allowed to travel for approved reasons, including showing up for court in New York. His trial date has been set for Oct. 2.
An affidavit by the FTX founder revealed Alameda funded the purchase of Robinhood shares which were later used as collateral for Alameda to secure a loan from BlockFi.
Sam Bankman-Fried, the disgraced founder of cryptocurrency exchange FTX, borrowed over $546 million from the exchange’s sister firm Alameda Research to fund his purchase of Robinhood shares.
Those same shares were later used by Bankman-Fried as collateral for a loan taken by Alameda from BlockFi, one of the entities that are laying claim to the shares.
An affidavit by Bankman-Fried filed in the Antigua and Barbuda High Court on Dec. 12 — the day of his arrest — and made public on Dec. 27, revealed he and FTX co-founder Zixiao “Gary” Wang took out the loans from Alameda through four promissory notes between April and May 2022.
On Apr. 30 loans of around $316.6 million and $35.1 million were given to Bankman-Fried and Wang respectively. Later, two loans of around $175 million and $19.4 million were given to Bankman-Fried on May. 15.
The loans were used to fund Bankman-Fried’s Antiguan-based shell company Emergent Fidelity Technologies Ltd. which acquired a 7.6% stake in brokerage firm Robinhood in May at a price of $648 million at the time.
He added that if the sum paid by Emergent for the shares was more than the stated $546 million he has “not [sic] doubt that such additional sum was borrowed by Gary and I” to fund the acquisition of the Robinhood shares.
The revelation of the loans could complicate the ongoing legal tug of war for the over 56 million shares in Robinhood that are now worth around $430 million.
Embattled crypto lender BlockFi is suing Bankman-Fried’s Emergent for the Robinhood shares that were allegedly pledged as collateral for BlockFi’s loans to Alameda on Nov. 9.
Related: Crypto OTC trading to get traction due to FTX fiasco, exec says
FTX stepped in on Dec. 23, asking for assistance from a U.S. bankruptcy judge to prevent BlockFi from claiming the shares. It said the shares are owned by Alameda and insisted FTX companies should keep the Robinhood stake while investigations continue into other claims of their ownership.
Additionally, Bankman-Fried and FTX creditor Yonathan Ben Shimon are laying claim to the shares.
Previously, FTX’s Chapter 11 bankruptcy filings in the United States revealed Bankman-Fried was on the receiving end of a $1 billion personal loan from Alameda.
Former Alameda CEO Caroline Ellison said on Dec. 23 as part of her plea deal that “Alameda was borrowing funds that FTX’s customers had deposited onto the exchange.”
Court filings show that debtors from FTX Trading Ltd. and Alameda Research want 56 million shares of Robinhood stock frozen after multiple creditors are seeking access to the funds, and also Sam Bankman-Fried (SBF). Court Filing Wants to ‘Enforce an Automatic Stay’ Against Claims Over FTX’s 56 Million Robinhood Shares On Dec. 22, 2022, court […]