In the latest update, Sam Bankman-Fried (SBF), former CEO of a bankrupt crypto exchange FTX, requests the court to block debtors’ access to his Robinhood shares. A report announced by US prosecutors revealed the Robinhood shares are worth $450 million.
SBF has been under house arrest since his apprehension by the Royal Bahamas Police Force after the U.S. filed criminal charges against him. All these took place in December 2022, weeks after the crash of his crypto exchange, leaving many with multiple losses.
Department of Justice Set To Seize SBF’s Robinhood Shares
FTX Exchange and Alameda Research are now under the control of liquidators assigned by the court. The liquidators are looking for any available assets to repay FTX debtors.
In a previous court hearing, a US Department of Justice prosecutor declared their intention to seize SBF’s’ shares worth $450 million. Meanwhile, the next hearing will reveal what the Department of Justice will do with the Robinhood shares.
Sam Bankman-Fried filed a motion to the United States Bankruptcy Court in Delaware opposing the enforcement of control over his shares. In the court filing, he claims the Robinhood shares have nothing to do with any FTX-affiliated firms.
In a Thursday filing, SBF’s’ lawyers argued that their client requires money to pay his legal fees and expenses.
Sam Bankman-Fried And History With Robinhood Shares
Meanwhile, many firms with considerable exposure to the now-bankrupt exchange are facing the domino effect of the crash. For example, Genesis Trading is also battling the aftermath of the FTX crisis. Also, crypto lending firm BlockFi has filed for bankruptcy and seeks to claim the Robinhood shares.
BlockFi claimed Sam Bankman-Fried promised to bail them out with a loan of $600 million, which he would obtain using the Robinhood shares as collateral. The ex-CEO signed agreements for BlockFi’s’ bailout of $240 million in July 2022. So BlockFi had significant exposure to FTX when the crisis occurred and had to file for bankruptcy.
Before BlockFi’s’ bankruptcy, FTX customers filed a class action lawsuit against Sam Bankman-Fried and FTX exchange. In the class action lawsuit, they claimed they have rights over all remaining assets of FTX. A class action lawsuit is when a plaintiff sues a defendant on behalf of a group or parties who would not be present in the court.
Notably, the embattled crypto exchange, FTX, revealed that it has over one million creditors in its bankruptcy filing. Reports also suggested that FTX and Sam Bankman-Fried are under investigation by law enforcement and regulatory agencies. Several notable celebrities lost significant sums of investment in the FTX fiasco; Tom Brady is among many investors in FTX.
Meanwhile, since the FTX collapse, FTT, the exchange’s native token, has declined over 75% and is currently trading at $0.916. FTT price has dropped by 2.45% in the last 24 hours.