The Department of Justice will allegedly work on determining the rightful owner of Robinhood shares during the "forfeiture proceedings."
The United States Departure of Justice (DOJ), a federal executive department of the United States government, has reportedly seized or is working on confiscating Robinhood shares tied to former FTX CEO Sam Bankman-Fried.
According to the Reuters report shared on January 4th, the news was allegedly revealed by the US attorney Seth Shapiro to the US Bankruptcy Judge John Dorsey.
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Seth Shapiro has reportedly claimed that the Department of Justice did not consider 56 million Robinhood shares as the property of a bankruptcy estate. It is worth noting that the estimated value of the shares is $465 million.
Nevertheless, Shapiro has allegedly claimed that the US DOJ plans to figure out who is the owner of 56 million Robinhood shares during “forfeiture proceedings.” Sam Bankman-Fried, BlockFi, and FTX have all claimed rights to the shares.
At the end of December, the news broke that the bankruptcy Judge overseeing the BlockFi bankruptcy case, Michael Kaplan, is planning to move Robinhood shares to a neutral broker or escrow account. The Judge was expecting to make the decision regarding the matter on January 9th.
On the same day BlockFi filed for bankruptcy, the company sued Sam Bankman-Fried’s holding company Emergent Fidelity Technologies. In the lawsuit, BlockFi claimed its rights to SBF’s Robinhood shares that the FTX co-founder allegedly pledged as collateral at the beginning of November.
After almost a month, FTX asked the United States Bankruptcy judge’s help to prevent BlockFi from claiming Robinhood shares. In its motion, FTX requested the court to enforce an automatic stay. Moreover, FTX claimed that all shares owned by FTX-related companies should remain intact pending investigations into claims to their ownership.
On top of that, at the end of December, Sam Bankman-Fried’s affidavit revealed that FTX co-founders Sam Bankman-Fried and Zixiao “Gary” Wang borrowed $546 million from Alameda Research to purchase Robinhood shares.