Feds Seize $700 Million in Assets from FTX Founder Sam Bankman-Fried

In a court filing revealed on Friday, federal prosecutors have seized nearly $700 million in cash and assets connected to Sam Bankman-Fried, the founder of crypto trading platform FTX. The assets were primarily in the form of Robinhood shares.

The seizure of assets comes as a result of criminal fraud charges against Bankman-Fried, who was arrested in December and released on a $250 million bond as he awaits trial. The move also follows the bankruptcy of FTX in November, which has left the company scrambling to rescue funds lost by depositors.

According to the court filing, the 55 million-plus Robinhood shares are at the center of a multi-party battle between Caribbean litigants, representatives of bankrupt crypto lender BlockFi, Bankman-Fried, and FTX’s bankruptcy leadership. Federal prosecutors have alleged that the Robinhood shares were purchased using allegedly stolen customer funds.

In addition to the Robinhood shares, three accounts held at Silvergate Bank and in the name of FTX Digital Markets, a Bahamian subsidiary, were also seized by the government. The accounts held over $6 million in U.S. dollars.

Bankman-Fried has denied misappropriating customer assets, but the ongoing legal battle and seizure of assets is a significant blow to the future of FTX. John Ray, the new CEO tasked with guiding the company through its restructuring, is now working to recover the lost funds.

The seizure of $700 million in assets connected to Sam Bankman-Fried, the founder of crypto trading platform FTX, is a significant development in the ongoing legal battle surrounding the company’s bankruptcy. The assets, primarily in the form of Robinhood shares, were seized by federal prosecutors as part of criminal fraud charges against Bankman-Fried. The company is now working to recover the lost funds and navigate its restructuring process under new leadership.