The US Department of Justice has seized more than 55 million Robinhood shares owned by FTX co-founders Sam Bankman-Fried and Gary Wang and valued at over $455 million, according to a Monday report by Coinbase. The value is pegged to Friday’s share price of $8.25. The stock was with a UK-based holding company.
Bankman-Fried is fighting to hold on to his shares, arguing the funds are needed to pay his legal defense and saying that he and Wang legitimately bought them with funds through FTX hedge company Alameda Research.
Robinhood didn’t immediately respond to a request for comment.
News of the DOJ’s seizure comes as FTX founder Bankman-Fried faces mounting legal troubles following the collapse of his cryptocurrency exchange. The loss of hundreds of millions in customer funds has hurt confidence in the cryptocurrency market. Bankman-Fried pleaded not guilty to fraud charges earlier this month. FTX is now being run by John Ray III, who’s overseeing the complicated bankruptcy process. He asked a judge last month to freeze FTX stock, a move opposed by Bankman-Fried.
FTX was one of the largest cryptocurrency exchanges in the world before going bankrupt late last year. Coindesk published a report last November saying FTX’s partner firm, Alameda Research, had a significant amount of holdings in FTX’s native token, FTT. Rival Crypto exchange Binance said it would sell all of its FTT, which led to mass withdrawals from customers. Bankman-Fried, and other top employees, had allegedly misused customer funds in risky investments which began to fold as the crypto market saw a major slide in 2022.
