Huge seizure of federal prosecutors towards SBF, the former CEO of FTX

Huge seizure of federal prosecutors towards SBF the former CEO
Source: Reuters

Federal authorities confiscated assets worth approximately $700 million belonging to Sam Bankman-Friedfounder of FTX en, including three accounts located at the Silvergate Bank where there were American dollars.

According to a court document dated Friday, January 20, 2023, federal prosecutors seized about $525 million in Robinhood stock, $94.5 million in cash from a Silvergate Bank account, more than $7 million from other Silvergate accounts, nearly $50 million in one Moonstone Bank account and assets in three Binance accounts.

The US Department of Justice revealed the seizure of 56 million shares of Robinhood at the beginning of the month. These shares are held by Sam Bankman-Fried and Gary Wang, co-founder of FTX, through the holding company Emerging Fidelity Technologiesand were purchased with a loan from his own hedge fund, Alameda Research.

The shares have been the subject of litigation between several parties, with a total of four entities claiming the shares. The bankrupt cryptocurrency lender BlockFia creditor of FTX, the new management of FTX, which is trying to recover the funds for investors and customers of the bankrupt platform, as well as the US government want to keep access to the shares.

Sam Bankman-Fried himself also had rights to these shares. SBF’s attorneys argued that the shares were held by a holding company that is not an FTX-related entity. They also said SBF needed the money to fund their legal fees..

Another $101.5 million of the seized assets were held in Silvergate Bank accounts in the name of FTX Digital Markets, a Bahamian subsidiary. These assets were seized by the government “on or around January 11,” the crypto bank said earlier this month.

Silvergate also revealed that it suffered a bank run following the collapse of FTX, which forced the company to sell assets at a significant loss in order to honor $8.1 billion in customer withdrawals. The crypto bank suffered a loss of $718 million on this sale.

The US Department of Justice (DOJ) seized nearly $50 million from an FTX Digital Markets account at Moonstone Bank, a digital bank with ties to FTX management. Just yesterday, the bank announced that it was stepping back from the crypto space and refocusing on the role of a “community bank” citing recent developments in the sector.

Finally, the DOJ seized an undisclosed amount of assets held in a Binance account and two Binance.US account numbers.

US prosecutors have charged SBF with eight criminal counts, including wire fraud and conspiracy to embezzle client funds. The former CEO has pleaded not guilty to all charges.

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Huge seizure of federal prosecutors towards SBF, the former CEO of FTX

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