Robinhood Assets Are Being Lost. In the latest update, Sam Bankman-Fried (SBF), the former CEO of the bankrupt crypto exchange FTX, is asking the court to prevent creditors from accessing his Robinhood shares. A report released by US Attorneys showed that Robinhood’s market capitalization reached $450 million. SBF has been under house arrest since his arrest by the Royal Bahamas Police Force after the United States filed criminal charges against him. This all took place in December 2022, weeks after his crypto exchange crashed, leaving plenty of multiple losses.
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The Department of Justice has Proposed a Takeover of SBF’s Robinhood Stock
FTX Exchange and Alameda Research are currently under the administration of court-appointed liquidators. Liquidators are seeking all available assets to repay FTX’s creditors. In a previous court case, an attorney at the United States Department of Justice announced their intention to seize $450 million worth of SBF shares.
Meanwhile, the next case will reveal what the Justice Department will do with Robinhood’s shares. Sam Bankman-Fried has filed a petition in the United States Bankruptcy Court in Delaware to resist the administrative application of its shares. In the court filing, it says Robinhood’s actions had nothing to do with FTX Partners. In a filing Thursday, attorneys for SBF argued that their client needed money to pay his legal fees and expenses.
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Sam Bankman-Fried and the Story with Robinhood Stock
Meanwhile, many companies with high exposure to the stock market now bankrupt are facing the domino effect of the crash. For example, Genesis Trading is also struggling with the consequences of the FTX crisis. In addition, crypto-lending company BlockFi has filed for bankruptcy and is looking to buy back Robinhood shares. BlockFi said Sam Bankman-Fried promised to bail them out with a $600 million loan, which he would get using Robinhood shares as collateral.
The former president signed an agreement for the redemption of BlockFi of $240 million in July 2022. So BlockFi had huge exposure to FTX when the crisis happened and filed for bankruptcy.
Prior to BlockFi’s bankruptcy, FTX clients filed a class action lawsuit against Sam Bankman-Fried and FTX Exchange. As part of the class action, they claimed ownership of all remaining FTX assets. A class action takes place when a plaintiff sues a defendant on behalf of one or more parties who will not be present in court.
Apparently, the struggling crypto exchange, FTX, revealed that it has more than one million borrowers in its financial filing. Reports also indicate that FTX and Sam Bankman-Fried are being investigated by law enforcement and regulators. Most famous festivals loses the amount of money in Fisco FTX; Tom Brady is a part of many FTX funds.