key takeaways
- The DOJ has seized more than 55 million Robinhood shares and $20.7 million belonging to Emergent Fidelity Technologies.
- While the holding company is not part of the FTX estate, the DOJ believes it was funded by Bankman-Fried with embezzled client money.
- Bankman-Fried had previously fought to keep the shares under his control to pay his legal fees.
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Despite Sam Bankman-Fried’s best efforts, the Justice Department decided to seize the Robinhood stock that the FTX wunderkind bought through Emergent Fidelity Technologies.
$490 million seized
Two months after the FTX collapse, authorities are still busy seizing assets related in one way or another to the defunct cryptocurrency exchange.
According to a court filing dated January 6, the Justice Department seized 55,273,469 Robinhood shares belonging to FTX founder Sam Bankman-Fried through a holding company, Emergent Fidelity Technologies. As of this writing, the shares are worth more than $469 million. The document indicates that the Justice Department seized another $20.7 million from Emergent Fidelity Technologies from an account at ED&F Man Capital Markets.
The DOJ said the assets had been seized because Bankman-Fried had purchased them with embezzled funds. According to the filing, Bankman-Fried’s assets constitute property involved in money laundering and wire fraud.
Other court document archived by FTX (under John Ray and the liquidation team) on December 22 claims that Emergent Fidelity Technologies is a special purpose holding company that had no business other than holding those shares. The company is reportedly 90% owned by Bankman-Fried.
While the DOJ acknowledged that FTX’s debtor, BlockFi, had expressed interest in having the assets turned over to it, it noted that Emergent Fidelity Technologies was not part of FTX’s estate and therefore was not yet involved in the case. bankruptcy proceedings.
The $490 million seizure is another blow to Bankman-Fried, who had asked to retain control of Emergent Fidelity Technologies. He claimed that he wanted to use Robinhood’s shares to pay his legal fees.
Bankman-Fried previously secured a $250 million bail package that requires her to stay home with her parents at their home in Palo Alto.
Disclaimer: At the time of writing, the author of this article owned BTC, ETH, and various other crypto assets.
