Former FTX CEO loses all Robinhood shares

Sam Bankman-Fried, accused of a particularly large cryptocurrency scam, has lost all of his shares in Robinhood. The US Department of Justice decided to confiscate existing assets from the former CEO of FTX.

It is known that he owned over 55,000,000 shares of Robinhood, which were valued at more than $450,000,000 in total. Now he was left without these assets, as stated in the lawsuit.

In addition, the regulator took it upon himself to seize not only these assets from the former head of FTX, but also to take more than $20,000,000 from the accounts of ED&F Man Capital Markets. According to representatives of the US Department of Justice, the selected money was involved in violations of criminal law, namely in the clause on money laundering.

They also specifically noted that the EF&F Man Capital Markets fraud was not related to the FTX bankruptcy.

It is noteworthy that the lawyers of Sam Bankman-Freed initially tried to interfere with the process of seizing his assets, but in the end, the regulator took over and did what it intended.

SBF lawyers argued that he needed these funds to cover the costs of litigation. They also noted that if he did not have the financial means to defend himself in court, he would suffer "irreparable damage."

Sam Bankman-Fried had a 7.6% stake in Robinhood. He purchased them back in May 2022, paying about $648,000,000 for 55,000,000 packages. This is not the first time the block of shares has got into the story with the convicted Bankman-Freed. Last November, cryptocurrency lending firm BlockFi filed a lawsuit following its bankruptcy seeking the forfeiture and transfer of 55,000,000 shares of Robinhood to them.

Apparently, their idea was that the shares were to be given to them as collateral for loans that had BlockFi, but could not repay due to the collapse of FTX.

In November 2022, FTX filed for bankruptcy, admitting their financial insolvency and reporting insurmountable difficulties with the liquidity of cryptocurrencies.

The first problems began on October 7 when the exchange announced the introduction of temporary restrictions on the withdrawal of funds. FTX announced the blocking of some cryptocurrency pairs and assets. Then people panicked and began to massively withdraw their funds from the exchange in those tokens in which this could be done.

Binance, which was trying to conclude a deal to take over the American cryptocurrency exchange, announced that they were selling their entire share of FTX, and as a result, the cost of the native token of the American platform dived from $25 to $3 in 3 days.

Reporters later revealed that FTX CEO Sam Bankman-Fried used client funds to cover the financial debts of his other firm, Alameda Research. The latter had obligations to large creditors in the amount of more than $3,000,000,000. At the moment, SBF denies his guilt, but experts say that he is well aware of what he did and for this reason he chooses words as carefully as possible in each speech.