Sam Bankman-Fried, the disgraced founder of FTX, requested access to the shares to cover his legal costs. The Justice Department has taken $464 million worth of Robinhood stock from him.
These 55 million shares, were seized after Bankman-Fried was charged by a Southern District grand jury last month. He is accused of wire fraud, conspiracy to defraud the United States, and violating campaign financing laws.
Federal prosecutors acknowledged in a court filing on Friday that they had obtained criminal and civil forfeiture orders to seize 55.3 million Robinhood shares and an extra $20.7 million in cash from UK brokerage ED&F Man Capital Markets.
Zixiao “Gary” Wang, another former FTX executive, owns 10% of Emergent Fidelity Technology. The business is 90% controlled by Bankman-Fried who holds the stock.
In the bankruptcy proceedings for the defunct cryptocurrency exchange FTX, the Robinhood stock had been a point of contention in court. The DOJ’s seizure has put an end to the dispute and made the shares inaccessible to all parties for the time being.
CEO John J. Ray III has asked the court to compel the freezing of the shares in order to use the proceeds to settle the firm’s debts.
In a court filing on Thursday, Bankman-attorneys Fried’s reacted, claiming that Emergent was not a party to the bankruptcy. He required access to the shares in order to pay his legal bills.
After his cryptocurrency exchange failed, Bankman-Fried, whose net worth was once estimated at $15.6 billion, claims to still have roughly $100,000 in cash on hand. He was subsequently accused of fraud.
Sam Bankman-Attorneys Fried Asserts That He Needs Shares in Robinhood to Pay For His Criminal Defense
Sam Bankman-legal Fried’s team has submitted a motion. The motion is in an effort to prevent the debtors of the exchange from possessing shares of Robinhood worth more than $450 million.
Bankman-attorneys Fried’s said that FTX debtors had failed to shoulder their enormous burden. They were legally entitled to more than 56 million Robinhood shares. The legal team verified allegations that the US Department of Justice was in the process of taking the shares. They claimed that given the stakes involved with the assets, SBF was “compelled to reply.”
It is improper for the FTX Debtors to ask the Court to presume that everything Mr. Bankman-Fried ever touched is presumptively fraudulent. According to the filing, which was made in reference to the Robinhood shares. Mr. Bankman-Fried has not been found criminally or civilly liable for fraud.
The court document includes Bankman-criminal Fried’s case with US authorities. He is charged with eight crimes, including wire fraud and breaking campaign funding regulations. His attorneys claim that SBF “needs part of these monies to pay for his criminal defense.” In accordance with case law, withholding cash could “constitute irreparable harm” to a defendant’s defense.
FTX, BlockFi, and Bankman-Fried have each previously staked claims for various reasons, despite the fact that the US Justice Department may soon hold all of the Robinhood shares.FTX has countered that the shares should remain under the firm’s management throughout the bankruptcy process.
Will Authorities Make Bankman-Fried Give Up His Property?
According to American lawyer Robert Shapiro, these products are either free of bankruptcy estates or are not subject to them. Thus, they do not need to be frozen, as most FTX assets are, while the company is winding down.
Photos show Sam Bankman-Fried, FTX's former CEO and alleged fraudster, who will sit in Bahamas' Fox Hill jail until Feb. 8, 2023, pending extradition to the United States. https://t.co/zwYwRVaJvB
— CNBC (@CNBC) December 14, 2022
Shapiro says that assets seized from various institutions will be processed for confiscation. Specifically mentioning Silvergate, a lender closely linked to FTX, in order to prevent criminals from profiting from the proceeds of crime.
Brian Glueckstein, Cromwell attorney for FTX, stated that the confiscations had nothing to do with Department of Justice investigation. Instead with Bankman-Fried FTX’s bankruptcy case as a civil matter.
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