US authorities will seize control of Robinhood shares that are in dispute by parties related to FTX, according to multiple reports on Jan. 4.
Those reports indicate that the US Department of Justice (DOJ) has seized or is seizing Robinhood shares related to FTX.
During a hearing, the DOJ attorney said the assets are not part of FTX’s bankruptcy estate and therefore do not need to be frozen like other FTX assets. That lawyer also said that other assets are being seized and that both Robinhood shares and other assets could be further controlled in forfeiture proceedings.
Several parties claim that they are entitled to the shares of Robinhood. Former FTX CEO Sam Bankman-Fried, individual investor Yonatan Ben Shimon, lending firm BlockFi, and FTX itself have all attempted to claim the disputed assets.
FTX and Alameda recently requested a freeze on the shares in its bankruptcy proceedings, while BlockFi has called for the shares to be moved to a neutral account. Statements from today’s hearing indicate that the shares are being seized in connection with the criminal case against Bankman-Fried, not at the request of FTX.
The Robinhood shares in dispute were purchased on behalf of Bankman-Fried by its holding company, Emergent Fidelity Technologies, last may.
Emergent bought those 56.2 million shares for $648.3 million. The shares were worth $482 million shortly after the purchase. At present, they are worth just $465 million.
