U.S. Attorney Seth Shapiro states that the DOJ does not believe the 56 million shares are part of the bankruptcy estate. The shares are also being claimed by BlockFi Inc., a bankrupt crypto firm, and liquidators of Emergent, which is in insolvency proceedings in Antigua. Bankman-Fried has pleaded not guilty to wire fraud and conspiracy counts and has acknowledged risk-management failures at FTX but denied any criminal liability.
FTX Bankruptcy Update: Prosecutors Seize $143 Million in U.S. Bank Accounts
U.S. prosecutors have seized approximately $143 million from U.S. bank accounts affiliated with FTX's Bahamas-based business, known as FTX Digital Markets. The accounts, held at Silvergate Bank and Farmington State Bank (doing business as Moonstone Bank), are currently overseen by U.S. Bankruptcy Judge John Dorsey, who is handling the FTX bankruptcy case.
James Bromley, an attorney for FTX, stated that none of the assets targeted for seizure are under the direct control of any of the FTX entities in Chapter 11. He also noted that the Robinhood shares, which multiple parties are claiming, are subject to ongoing litigation, and it is an "open question" as to who owns them.
Sam Bankman-Fried Charged with "Fraud of Epic Proportions" in FTX Collapse
Sam Bankman-Fried, CEO of cryptocurrency exchange FTX, has been charged with wire fraud and conspiracy in relation to the collapse of the company. According to U.S. prosecutors, Bankman-Fried engaged in a "fraud of epic proportions" over several years, costing investors, customers, and lenders billions of dollars. The allegations include using customer deposits to support Bankman-Fried's hedge fund, Alameda Research. Bankman-Fried has pleaded not guilty to the charges and has claimed that he did not believe he was criminally liable, despite acknowledging risk-management failures at FTX.
Bankruptcy and Insolvency Proceedings Involving FTX, BlockFi, and Emergent
The collapse of FTX has led to many bankruptcy and insolvency proceedings involving the company and other firms connected to the case. FTX is currently in Chapter 11 bankruptcy, with U.S. Bankruptcy Judge John Dorsey overseeing the case. BlockFi Inc., another bankrupt crypto firm, is suing Emergent to seize Robinhood shares pledged as collateral by Alameda Research to guarantee repayment of a loan made by BlockFi.
Emergent, incorporated in Antigua, is also in insolvency proceedings in that country. In addition, liquidators in Antigua have laid claim to the Robinhood shares, along with Sam Bankman-Fried and other parties. The shares' ownership, valued at approximately $465 million, is currently in dispute.