In a Delaware bankruptcy court hearing, the US Justice Department said that it had taken control of $450 million in Robinhood shares from FTX.
To buy stock in the publicly traded Robinhood platform, then-CEO Sam Bankman-Fried and cofounder of FTX Gary Wang established a holding company named Emergent in May 2022. Bankman-Fried and Wang claimed in an affidavit submitted in December that they obtained loans totalling $546 million from Alameda Research to pay for the shares.
In the hearing, a representative for FTX stated that it was not obvious who owned the shares. BlockFi is another potential claimant to the shares, in addition to FTX creditors. According to BlockFi, Bankman-Fried guaranteed the shares to it, and the now-bankrupt business has filed a lawsuit to recover the pledged shares.
"The seizures that have taken place were ordered by the court in connection with the criminal actions in the Southern District of New York with respect to Mr. Bankman, Miss Ellison and Mr. Wang," FTX lawyer James Bromley said on Wednesday. "The things that are being seized have to do with the Robinhood stock."
In addition to procedures going on in Antigua and Barbuda over the Robinhood shares, Bromley mentioned continuing litigation following the failure of FTX and the subsequent chapter 11 bankruptcy of BlockFi in November 2022.
