FTX-Linked Robinhood Stake Worth $460 Million Is Seized by US

Steven Church, Bloomberg News

The Robinhood website on a laptop computer arranged in Hastings-On-Hudson, New York, U.S., on Friday, Jan. 29, 2021. GameStop Corp. advanced on Friday and was on track to recoup much of Thursday’s $11 billion blow after Robinhood Markets Inc. and other brokerages eased trading restrictions on the video-game retailer. , Bloomberg

(Bloomberg) -- The US government has seized — or is in the process of seizing — hundreds of millions of dollars worth of Robinhood Markets Inc. shares as part of the fraud case against Sam Bankman-Fried, founder of the failed crypto firm FTX, lawyers said in court Wednesday.

The government also is taking control of assets in bank accounts that were part of a bankruptcy case involving one unit of the FTX empire in the Bahamas, said James Bromley, a lawyer leading the main FTX insolvency proceeding in the US.

The seizures began as part of the fraud case against Bankman-Fried and other top FTX officials.

The shares, now worth more than $460 million, have been claimed by various creditors of FTX, who filed court cases to try to control of them. A court hearing will eventually be held to determine what happens to the shares and the assets seized from the bank accounts, Seth B. Shapiro, a lawyer with U.S. Department of Justice said during a court hearing held by video in Wilmington, Delaware.

Bankman-Fried was extradited from the Bahamas last month to face fraud charges in the US.

The bankruptcy case is FTX Trading Ltd., 22-11068, U.S. Bankruptcy Court for the District of Delaware.

--With assistance from Chris Dolmetsch.