FTX’s Bankman-Fried loses $450m legal defense funds

The United States Department of Justice (DoJ) has finally seized the $465 million worth of shares owned by Futures Exchange (FTX) co-founders, Sam Bankman-Fried and Gary Wang, in stock-trading app, Robinhood.

It was learnt that the U.S authorities took possession of the investment on Monday, creating a blow to Bankman-Fried who had plans for the funds.

Bankman-Fried had stated last week that he intends to use part of the $450 million to fund his legal defense against the charges of two counts of wire fraud and six conspiracy counts.

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Ripples Nigeria had previously reported that U.S. Attorney, Seth Shapiro, informed the court that Bankman-Fried should be prevented from accessing the $450 million.

Bankman-Fried and Wang had acquired 55 million shares in Robinhood, which accounts for 7.6 per cent stake of the stock-trading app.

READ ALSO:FTX’s Bankman-Fried to lose Robinhood’s $460m investment to U.S govt

Shapiro told the court to grant the U.S authorities to seize the investment, as its not part of FTX’s bankruptcy estate, which is the property of a debtor that files bankruptcy.

Recall that in December, FTX had filed for bankruptcy, with the U.S authorities filing conspiracy to commit fraud charge against Bankman-Fried.

It was gathered that there are multiple claims to the investment in Robinhood, from BlockFi, a cryptocurrency leader that is also in a bankruptcy process, to other creditors laying claim to the funds.

According to BlockFi, it owns the shares in Robinhood because FTX used the investment as collateral for loan obtained from the firm.

However, the investment was made by Emergent Fidelity Technologies, which Bankman-Fried owns 90 per cent of and Wang owns 10 per cent

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