Shares of Robinhood Worth $450M Seized by Regulators From FTX

• The next court date involving FTX, and the Robinhood shares is set for January 20, 2023.
• FTX’s creditors and BlockFi stake a claim to the shares.

While FTX was in bankruptcy proceedings in Delaware, the U.S. Department of Justice announced that it had seized $450 million worth of Robinhood stock.

To acquire ownership in the publicly listed Robinhood platform. Former FTX CEO Sam Bankman-Fried and FTX co-founder Gary Wang launched a holding company named Emergent in May 2022. Bankman-Fried and Wang claimed in a December affidavit that they acquired the stock using $546 million in loans from Alameda Research.

Multiple Claims Over the Shares

During the hearing, an attorney representing FTX said that it was unclear who the shares’ actual owner was. In addition to FTX’s creditors, BlockFi might stake a claim to the shares. As BlockFi claims, Bankman-Fried guaranteed it those shares, and the insolvent firm has filed suit to recover its investment.

Bromley mentioned procedures in Antigua and Barbuda about the Robinhood shares, as well as litigation following the collapse of FTX and subsequent chapter 11 bankruptcy of BlockFi in November 2022.

Bromley stated:

“We are obviously reserving our rights with respect to the debtors and expect that the other parties are as well, but just wanted to make sure that it was clear that the Robinhood shares that were being seized were being seized from accounts that are not currently under the control of the debtors.”

The Department of Justice said at the hearing that it will submit a notice of seizure detailing the agency’s seized assets. The next court date involving FTX, the Robinhood shares, and any new developments is set for January 20, 2023, with the presiding judge clearing his or her schedule for the full day.

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