Bankman-Fried acquired nearly 8% stake in Robinhood

The US Department is now the process of seizing 56 million shares of Robinhood Markets Inc, tied to FTX and its former CEO, Sam Bankman-Fried.

Robinhood Markets Inc is an American financial services company headquartered in Menlo Park, California that facilitates commission-free trades of stocks, exchange-traded funds and cryptocurrencies via a mobile app introduced in March 2015. Bankman-Fried acquired a nearly eight per cent stake in Robinhood via a holding company he set up with FTX co-founder, Gary Wang.

Justice Department officials reportedly told a bankruptcy judge that they are seizing more than US$400-million worth of Robinhood shares linked to FTX as part of the case against the crypto exchange.

Robinhood shares worth roughly US$468 million

According to a Reuters report, US officials on Wednesday (January 4) told the judge they were in the process of seizing assets tied to FTX and Bankman-Fried, which included 56 million Robinhood shares worth roughly US$468 million at the time of publication.

The report comes a day after a judge in a criminal case ordered him not to access or transfer any cryptocurrency or assets from FTX or Alameda Research, which was a cryptocurrency trading firm co-founded in September 2017 by Sam Bankman-Fried and Tara MacAulay.

Amid FTX’s bankruptcy proceedings, control of the Robinhood shares has been under contention as many investors and creditors look to stake their claim.

BlockFi, Bankman-Fried and FTX creditor, Yonathan Ben Shimon have all staked claims to the assets.

Bankman-Fried purchased about 7.42 per cent of Robinhood’s stock through Emergent Fidelity Technologies Ltd, using funds borrowed from Alameda Research, according to an affidavit he filed in December in an Antigua court.

Bankman-Fried not guilty plea

Two days ago, Bankman-Fried pleaded not guilty to eight criminal counts, including wire fraud, securities fraud and violations of campaign finance laws in a federal court. He also previously denied moving funds from Alameda, saying he no longer had access to the wallets since stepping down as CEO in November.

The former FTX CEO has been under house arrest at his parents’ home in California since December but has been allowed to travel for approved reasons, including showing up for court in New York. His trial date has been set for October 2.