Feds seize almost $700 million of FTX assets in Sam Bankman-Fried criminal case

Federal prosecutors seized nearly $700 million in cash and assets connected to Sam Bankman-Fried, primarily in the form of Robinhood shares that were owned by the FTX founder, a court filing revealed Friday.

John Ray, who replaced Bankman-Fried as CEO to guide FTX’s restructuring, is trying to rescue funds that were lost by the crypto company’s depositors when the firm spiraled into bankruptcy in November. Bankman-Fried was arrested on criminal fraud charges in December and is released on a $250 million bond as he awaits trial.

The 55 million-plus Robinhood shares are at the heart of a contentious multi-party battle between Caribbean litigants, representatives of bankrupt crypto lender BlockFi, Bankman-Fried himself, and FTX’s bankruptcy leadership.

Federal prosecutors have alleged that the Robinhood shares were purchased using allegedly stolen customer funds. In May, Bankman-Fried revealed that he’d purchased a 7.6% stake in Robinhood and said at the time “we think it is an attractive investment.” The stock closed Friday at $9.52, valuing the recovered shares at over $526 million.

Bankman-Fried has denied misappropriating customer assets.

Three of the seized accounts were held at Silvergate Bank, in the name of FTX Digital Markets, holding over $6 million. Those assets, held in the name of a Bahamian subsidiary, were assumed by the government “on or about” Jan. 11. Silvergate recently disclosed that customer deposits plunged by nearly 70% in the fourth quarter of 2022.

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