Sam Bankman-Fried’s Robinhood shares are set to be seized by US authorities, an attorney said Wednesday.
Bankman-Fried disclosed a 7.6% in the trading app provider in May 2022.
The now-disgraced FTX founder pleaded not guilty to wire fraud and conspiracy charges earlier this week.
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US authorities are set to seize Sam Bankman-Fried’s Robinhood shares, a lawyer said Wednesday – temporarily halting a four-way battle for the FTX founder’s $470 million stake in the trading app provider.
Attorney Seth Shapiro told a virtual court hearing that the Department of Justice is working to take custody of the shares rather than allowing them to be held up in a bankruptcy dispute, according to Reuters.
Bankman-Fried, FTX’s new bosses, bankrupt crypto lender BlockFi and FTX creditor Yonatan Ben Shimon have all laid claim to the Robinhood stake, per a December 22 court filing.
But the four-way fight for control of the shares is now likely to be decided by forfeiture – a separate legal process that aims to stop criminals from financially benefiting from their crimes – rather than bankruptcy proceedings, Shapiro told US judge John Dorsey.
Bankman-Fried disclosed a 7.6% stake in Robinhood in May, acquiring 56.3 million shares in the trading platform for $648 million through an Antigua-based holding company called Emergent Fidelity Technologies.
Robinhood shares traded at $8.36 as of Wednesday’s closing bell – meaning that Emergent’s position is now worth just over $470 million.
Robinhood chief executive Vlad Tenev has previously said that he expected Emergent’s stake in his company to be locked up in legal proceedings for a considerable period..
“I’m not surprised that it’s one of the more valuable assets they have on their balance sheet, because it is public company’s stock,” he told CNBC’s “Squawk Box” last month.
“We’re just watching this unfold,” he added. “And it’s going to be locked up in bankruptcy proceedings — most likely for some time — and so we’re just kind of seeing how that plays out.”
Bankman-Fried pleaded not guilty to eight wire fraud and conspiracy charges brought against him by US prosecutors in a Manhattan federal court Tuesday.
Prosecutors said that he had perpetrated a years-long “fraud of epic proportions” by funneling FTX customers’ money to the exchange’s sister trading firm Alameda Research.
Read more: Sam Bankman-Fried is facing off against FTX’s new bosses in a 4-way battle for $450 million of Robinhood shares
SBF’s Robinhood Stake to Be Seized by US Authorities, Attorney Says
