Feds seize almost $700 million of FTX assets in Sam Bankman-Fried criminal case

Former FTX chief executive Sam Bankman-Fried (C) arrives to enter a plea before US District Judge Lewis Kaplan in the Manhattan federal court, New York, January 3, 2023. 
Ed Jones | AFP | Getty Images

Federal prosecutors seized nearly $700 million in cash and assets connected to Sam Bankman-Fried, primarily in the form of Robinhood shares that were owned by the FTX founder, a court filing revealed Friday.

John Ray, who replaced Bankman-Fried as CEO to guide FTX’s restructuring, is trying to rescue funds that were lost by the crypto company’s depositors when the firm spiraled into bankruptcy in November. Bankman-Fried was arrested on criminal fraud charges in December and is released on a $250 million bond as he awaits trial.

The 55 million-plus Robinhood shares are at the heart of a contentious multi-party battle between Caribbean litigants, representatives of bankrupt crypto lender BlockFi, Bankman-Fried himself, and FTX’s bankruptcy leadership.

Federal prosecutors have alleged that the Robinhood shares were purchased using allegedly stolen customer funds. In May, Bankman-Fried revealed that he’d purchased a 7.6% stake in Robinhood and said at the time “we think it is an attractive investment.” The stock closed Friday at $9.52, valuing the recovered shares at over $526 million.

Bankman-Fried has denied misappropriating customer assets.

Three of the seized accounts were held at Silvergate Bank, in the name of FTX Digital Markets, holding over $6 million. Those assets, held in the name of a Bahamian subsidiary, were assumed by the government “on or about” Jan. 11. Silvergate recently disclosed that customer deposits plunged by nearly 70% in the fourth quarter of 2022.

Almost $50 million was custodied at Moonstone Bank, a U.S. financial institution with ties to FTX management, the court filing shows.

Federal prosecutors did not disclose the value of funds or assets in one Binance account and two Binance.US account numbers. Those three Binance accounts were the only seized assets that did not have values attached to them.

WATCH: FTX CEO reportedly open to restarting operations

Technology

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