In the latest update, Sam Bankman-Fried (SBF), the former CEO of the bankrupt crypto exchange FTX, asked the court to block the debtor’s access to Robinhood shares. A report released by US prosecutors says Robinhood’s shares are worth $450 million.
SBF has been under house arrest since his arrest by the Royal Bahamas Police Force after the US filed criminal charges against him. All this happened in December 2022, a few weeks after the crash of the crypto exchange, causing many losses.
Department of Justice Ready to Seize Robinhood SBF Shares
FTX Exchange and Alameda Research are currently under the control of liquidators appointed by the court. The liquidator is looking for available assets to pay FTX’s debts.
At a previous court hearing, prosecutors from the US Department of Justice announced their intention to seize SBF’s shares worth $450 million. Meanwhile, the next hearing will reveal what the Justice Department will do with Robinhood’s stock.
Sam Bankman-Fried filed a motion with the United States Bankruptcy Court in Delaware against the enforcement of control over the shares. In court filings, they claimed that Robinhood’s shares were unrelated to FTX-related companies.
In Thursday’s filing, SBF’s lawyers said the client needed the money to pay legal fees and expenses.
Sam Bankman-Fried And History With Robinhood Shares
Meanwhile, many companies with large exposures to the stock market are now bankrupt facing the domino effect of the crash. For example, Genesis Trading also struggled after the FTX crisis. Also, crypto lender BlockFi has filed for bankruptcy and is seeking to claim Robinhood’s shares.
BlockFi claims Sam Bankman-Fried promised to bail them out with a $600 million loan, which they will have using Robinhood shares as collateral. The former CEO signed an agreement to bailout BlockFi $ 240 million in July 2022. So BlockFi has significant exposure to FTX when the crisis occurs and has to file for bankruptcy.
Prior to BlockFi’s bankruptcy, FTX customers filed a class action lawsuit against the exchange Sam Bankman-Fried and FTX. In the class action lawsuit, they claim they have rights to all of FTX’s remaining assets. A class action lawsuit is when a plaintiff sues a defendant on behalf of a group or party that would otherwise not be in court.
In particular, the defunct crypto exchange, FTX, announced that it has more than one million creditors in a bankruptcy filing. Reports also suggest that FTX and Sam Bankman-Fried are being investigated by law enforcement and regulatory agencies. Several notable celebrities lost significant amounts of their investments in the FTX fiasco; Tom Brady is among the many investors in FTX.
Meanwhile, since the collapse of FTX, FTT, the original token of the exchange, has dropped more than 75% and is currently trading at $0.916. The price of FTT has decreased by 2.45% in the last 24 hours.