• The United States Department of Justice (DOJ) is preparing to seize and liquidate Sam Bankman-Fried’s (SBF) 56 million Robinhood Markets Inc (NASDAQ: HOOD) shares valued at approximately $465 million.
• The DOJ believes SBF engaged in a year-long fraud business that cost investors and customers billions of dollars.
• US attorney Seth Shapiro told US Bankruptcy Judge John Dorsey that SBF’s stake in Robinhood are proceeds of FTX and the $465 million should be seized and shared between FTX stakeholders including BlockFi.
The United States Department of Justice (DOJ) is taking action against Sam Bankman-Fried (SBF) by preparing to seize and liquidate his 56 million Robinhood Markets Inc (NASDAQ: HOOD) shares valued at approximately $465 million. This move comes as a result of the DOJ’s belief that SBF has been engaging in fraudulent activities for the past year, which have cost investors and customers billions of dollars.
US attorney Seth Shapiro appeared before US Bankruptcy Judge John Dorsey to explain the DOJ’s stance on the matter. He stated that the $465 million worth of shares held by SBF are proceeds from FTX and should be seized and shared between FTX stakeholders that include BlockFi. SBF has since pleaded not guilty to the fraud charges filed against him in a United States court and the hearing is set to occur in October.
The DOJ is alleging that SBF used funds borrowed from Alameda Research to purchase 7.42 percent of HOOD stock via Emergent Fidelity Technologies Ltd. This is an unprecedented move for the DOJ and could have wide-ranging implications for both Robinhood and FTX.
At this time, the exact details of the case remain unclear. However, it is clear that the DOJ will be taking a hard approach to the case in order to hold those responsible accountable. The outcomes of this case could have a profound impact on the financial markets and the way that companies are regulated in the future.
It remains to be seen how this case will play out and what the final verdict will be. However, it is clear that the DOJ is taking a strong stance in order to protect investors and customers from fraudulent activities.