US Government to Seize $465M Worth of Robinhood Shares Linked to SBF (Report)

The American authorities have reportedly seized or will soon confiscate 56 million shares of Robinhood tied to the former CEO of FTX – Sam Bankman-Fried (SBF).

The 30-year-old recently sought help from a United States Bankruptcy Court to obtain control of the HOOD stocks. 

SBF Takes Another Punch

According to a Bloomberg coverage, the American government is in the process of seizing around $468 million worth of Robinhood shares owned by Bankman-Fried. The source indicated that the officials might have already completed the seizure.

The operation is part of the massive law case against FTX’s former executive, who faces numerous charges, including wire fraud and money laundering. 

SBF purchased a 7.6% stake in the financial services company in May last year, praising Robinhood as an “attractive investment.” Recent reports hinted that the former crypto mogul borrowed over half a billion dollars from Alameda Research to finance the deal, partnering with FTX Co-Founder – Zixiao (Gary) Wang. SBF gained 90% ownership of the 56 million shares, while Wang had 10%. 

Bankman-Fried and the former CEO of Alameda – Caroline Ellison – later used the stocks as collateral to obtain a loan from the cryptocurrency lender BlockFi, which prompted a significant dispute in the following months.

Three parties (SBF, BlockFi, and FTX creditor Yonathan Ben Shimon) claimed they were the rightful owners of the stash. The collapsed exchange even asked the US authorities to stop the others from claiming ownership of the shares. 

Emergent’s broker – ED&F Man Capital Markets – froze the HOOD stake in mid-November (shortly after FTX and Alameda Research filed for bankruptcy protection). Bankman-Fried reportedly tried to sell the stocks via the Signal application before the filing.

No Acquisition Deal

FTX rapidly expanded its presence in the first half of 2022, acquiring multiple cryptocurrency entities. Some reports from last summer suggested that the platform’s next target would be Vlad Tenev’s Robinhood. While SBF said in the following days that he is fond of the brokerage app, he outlined that FTX had no plans to actually purchase it:

“I have always been impressed by the business that Vlad and his team have built. That being said, there are no active M&A conversations with Robinhood.”

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Source: https://cryptopotato.com/us-government-to-seize-465m-worth-of-robinhood-shares-linked-to-sbf-report/