US authorities have reportedly seized or will soon seize 56 million Robinhood shares linked to former FTX CEO Sam Bankman-Fried (SBF).
The 30-year-old recently sought help from a United States Bankruptcy Court to gain control of HOOD’s stock.
SBF takes another hit
According to a Bloomberg coverage, the US government is in the process of seizing around $468 million in Robinhood shares owned by Bankman-Fried. The source indicated that officials may have already completed the seizure.
The operation is part of the massive legal case against the former FTX executive, who is facing numerous charges, including wire fraud and money laundering.
SBF bought a 7.6% stake in the financial services firm in May last year, praising Robinhood as an “attractive investment.” recent reports implied that the former cryptocurrency mogul borrowed more than half a billion dollars from Alameda Research to finance the deal, partnering with FTX co-founder Zixiao (Gary) Wang. SBF obtained 90% ownership of the 56 million shares , while Wang had 10%.
Bankman-Fried and former Alameda CEO Caroline Ellison later used the shares as collateral to obtain a loan from cryptocurrency lender BlockFi, sparking a major dispute in the months that followed.
Three parties (SBF, BlockFi, and FTX creditor Yonathan Ben Shimon) claimed they were the rightful owners of the stash. The exchange collapsed even order the US authorities to prevent others from claiming ownership of the shares.
Emergent’s broker, ED&F Man Capital Markets, froze HOOD’s stake in mid-November (shortly after FTX and Alameda Research filed for bankruptcy). Bankman-Fried reportedly attempted to sell the shares via the Signal app ahead of the filing.
No acquisition agreement
FTX rapidly expanded its presence in the first half of 2022, acquiring multiple cryptocurrency entities. Some reports from last summer He suggested that the platform’s next target would be Vlad Tenev’s Robinhood. Although SBF said in the days that followed that he liked the brokerage app, he border that FTX had no plans to actually buy it:
“I have always been impressed with the business that Vlad and his team have built. That said, there are no active M&A talks with Robinhood.”
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This post US Government to Seize $465 Million in Robinhood Shares Linked to SBF (Report)
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