Disgraced former crypto billionaire Sam Bankman-Fried’s $450 million worth of Robinhood stock has been seized by Justice Department prosecutors.
Bankman-Fried and disgraced crypto executive Gary Wang purchased roughly 55 million shares, through a holding company, Emergent Fidelity Technologies, an LLC Bankman-Fried has a 90% ownership stake in, Insider reported.
Sam Bankman-Fried’s Robinhood shares have been seized by the Justice Department in FTX case https://t.co/p0fSUswG89
— Insider Business (@BusinessInsider) January 9, 2023
Bankman-Fried said in an affidavit he borrowed $546 million in customer funds from crypto trading firm Alameda Research, the sister hedge fund to Bankman-Fried’s crypto exchange FTX, Bloomberg reported.
Bankman-Fried’s legal team fought to keep his investment in order for him to pay his legal bills, according to a Jan. 5 court filing. FTX’s new leadership, crypto exchange BlockFi and FTX creditor Yonatan Ben Shimon also submitted claims to the Robinhood shares, according to a Dec. 22 court filing.
Bankman-Fried was indicted Dec. 13 by federal prosecutors on eight counts of fraud and conspiracy, including wire fraud, money laundering and campaign finance violations. (RELATED: Ethics Watchdog Calls For Investigation Of Biden Officials’ Connections To Sam Bankman-Fried)
According to the indictment, he “agreed with others to defraud customers of FTX.com by misappropriating those customers’ deposits and using those deposits to pay expenses and debts of Alameda Research, Bankman-Fried’s proprietary crypto hedge funds, and to make investments.”
Bankman-Fried pleaded not guilty to the charges Jan. 3 after he was released from custody and sent back to his parents house on a $250 million bond Dec. 22. His trial date was set for Oct. 2 by New York Southern District judge Lewis Caplan.
Wang served as FTX Chief Technology Officer and has pledged to cooperate with prosecutors in their case against Bankman-Fried. He pleaded guilty to seven counts of fraud and conspiracy before he was released on $250,000 bond.
Wang said in a Dec. 19 plea hearing he was instructed by Bankman-Fried to alter its code for Alameda to have special capabilities on the platform, according to Reuters.
FTX filed for chapter 11 bankruptcy Nov. 11 in the wake of allegations customer funds were misused. The exchange and its U.S. operation were worth an estimated $40 billion in January 2022, according to Forbes Magazine.