US Justice Department to seize $450 million worth of Robinhood shares tied to FTX and Alameda Research

FTX creditors, as well as former executives, including the ex-Chief Executive Officer Sam Bankman-Fried, have been left disappointed. The turn of events has now brought the contested shares of Robinhood into the hands of the authorities, bringing dejection to the rest of the claimants.

FTX founder loses Robinhood shares

FTX saga continued on Wednesday, with the United States Department of Justice (DOJ) bringing an end to the contention of 56 million Robinhood shares. The shares, worth approximately $450 million, have been tied to FTX and its former CEO, Sam Bankman-Fried. 

As per Reuters, the DOJ  is in the process of seizing multiple assets tied to FTX and its co-founder, which also includes the Robinhood shares.

In the past, these shares have been attempted to be claimed by a bunch of different entities, including Sam Bankman-Fried himself. As reported by FXStreet last month, even the current CEO of FTX, John Ray, demanded intervention from the US bankruptcy court. 

This was also because, in addition to Bankman-Fried, FTX creditors, as well as BlockFi, have also been attempting to claim entitlement over these shares. DOJ  senior trial counsel Seth Shapiro noted,

“We did want the court to know about those seizures,” Shapiro said. “We either believe that these assets are not the property of the bankruptcy estate, or that they fall within the exceptions … of the bankruptcy code.”

Sam Bankman-Fried prepares for battle

Earlier this week, Sam Bankman-Fried pled not guilty to the barrage of criminal charges placed against him, including fraud and campaign finance. These charges came to be following the comingling of funds with FTX’s sister company, Alameda Research, orchestrated by the defendant.

Consequently, Bankman-Fried pushed the case to trial, with the court proceedings set to take place in October. The accused will have until then to change his plea, which seems unlikely for now.