US federal prosecutors have seized nearly US$700 million in cash, stock and assets related to FTX Founder Sam Bankman-Fried, who is suspected of misappropriating customer funds. Most of the funds seized were in the form of Robinhood shares owned by Sam Bankman-Fried.
John Ray, who succeeded Bankman-Fried as CEO to guide FTX’s restructuring, was trying to salvage funds lost by crypto firm customers when the company filed for bankruptcy in November. Bankman-Fried was arrested on criminal fraud charges in December and released on $250 million bail while he awaits trial.
More than 55 million shares of Robinhood Bankman-Fried are being fought over by various parties such as Caribbean plaintiffs, representatives of bankrupt crypto lender BlockFi, Bankman-Fried himself, and several FTX bosses.
Federal prosecutors allege that Robinhood stock was purchased using customer funds allegedly misappropriated by Bankman-Fried. In May, Bankman-Fried disclosed that he had purchased a 7.6% stake in Robinhood and said at the time “we think it’s an attractive investment.” The stock closed Friday January 20, 2022 at $9.52, making it worth approximately $526 million.
Three of the accounts seized were held at Silvergate Bank, in the name of FTX Digital Markets, with a value of more than $6 million. The assets, held in the name of a subsidiary in the Bahamas, were expropriated by the government “on or about” January 11. Silvergate recently disclosed that customer deposits plunged nearly 70% in the fourth quarter of 2022.
Nearly $50 million was held at Moonstone Bank, a US financial institution with ties to FTX management, according to court filings.
Federal prosecutors did not disclose the value of funds or assets in one Binance account and two Binance.US accounts. All three Binance accounts are seized assets that have no value attached to them.