FTX ex-CEO's Robinhood shares snatched by US 'Sheriff', FTT retreats from highs

FTX saga took another unfavourable turn for its embattled owners on Monday, after the US Department of Justice (DOJ) seized $450 million worth of shares owned by Samuel Bankman-Fried and his FTX co-founder Gary Wang on trading platform Robinhood. At the same time, FTX's exchange token FTT reversed a spike to $1.150, to drop back to just over $1.003, though the token's price remains 10% up on the day. 

FTX's Bankman-Fried losses Robinhood shares worth $450m after US DOJ snatch

Despite FTX co-founders Sam Bankman-Fried and Gary Wang claiming that the 55 million Robinhood shares should remain beyond the reach of liquidators, the US authorities do not agree and they have been requisitioned by the DOJ on Monday, January 9, 2023.

The struggle over whether Bankman-Fried and Wang should retain the shares, worth an estimated $450m, began last week when reports of the Justice Department looking to seize the shares came to light. After Sam Bankman-Fried was notified of their intention the ex-CEO filed a plea claiming ownership. 

Bankman-Fried’s lawyers argued that the Robinhood shares could not be seized as they were not a part of the cryptocurrency exchange’s bankruptcy estate. As per the filing, the shares were owned by Emergent Fidelity technologies which the FTX founder had a 90% stake in.

However, the plea has seemingly been in vain, as according to the Justice Department, the Robinhood shares have become a part of money laundering and wire fraud violation, thus rendering their seizure lawful.

FTT price in the green

FTT price stays in the green during trading on Monday as the cryptocurrency traded at $1.030 at the time of writing. This marks a 10% daily rise for the altcoin although it was substantially lower than its intraday peak at 1.150, an almost 25% rise on the day.

In order for FTT price to turn $1.000 into a support floor, the cryptocurrency will have to keep its head above the one Dollar level over the next few hours, and close above $1.032. This level was tested last week when the altcoin rallied by 13%, but was invalidated soon after.

FTT/USD 4-hour chart

Persistent fear in the market, however, does present some threat to FTT's future fortunes, and could result in FTT price losing the $0.965 support ledge. Slipping further would lead to the altcoin tagging $0.939 and $0.903, and a daily candlestick close below the latter level invalidating the bullish thesis, and probably pushing the price further down to $0.880.