Key Takeaways
- The DOJ has seized over 55 million Robinhood shares and $20.7 million belonging to Emergent Fidelity Technologies.
- While the holding company isn’t part of the FTX estate, the DOJ believes it was funded by Bankman-Fried with misappropriated customer money.
- Bankman-Fried had previously fought to keep the shares in his control in order to pay for his legal fees.
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Despite Sam Bankman-Fried’s best efforts, the DOJ has decided to seize the Robinhood shares the FTX whiz kid bought through Emergent Fidelity Technologies.
$490 Million Seized
Two months after FTX’s collapse, authorities are still busy seizing assets related in one way or another to the defunct crypto exchange.
According to a court filing dated January 6, the Department of Justice has seized 55,273,469 shares of Robinhood stock belonging to FTX founder Sam Bankman-Fried through a holding company, Emergent Fidelity Technologies. At the time of writing, the shares are worth more than $469 million. The document indicates that the DOJ seized a further $20.7 million from Emergent Fidelity Technologies from an account at ED&F Man Capital Markets.
The DOJ said the assets had been seized because they had been bought by Bankman-Fried with misappropriated funds. According to the filing, Bankman-Fried’s assets constitute property involved in money laundering and wire fraud.
Another court document filed by FTX (under John Ray and the liquidation team) on December 22 claims that Emergent Fidelity Technologies is a special-purpose holding company that had no other business except holding that stock. The company is reportedly 90% owned by Bankman-Fried.
While the DOJ acknowledged that FTX debtor BlockFi had expressed an interest in being handed over the assets, it pointed out that Emergent Fidelity Technologies was not part of the FTX estate and therefore not involved in the bankruptcy proceedings yet.
The $490 million seizure is another blow to Bankman-Fried, who had petitioned to keep control of Emergent Fidelity Technologies. He claimed he wanted to use the Robinhood shares to pay for his legal fees.
Bankman-Fried previously secured a $250 million bail package that requires him to stay at home with his parents in their house in Palo Alto.
Disclaimer: At the time of writing, the author of this piece owned BTC, ETH, and several other crypto assets.
