The United States Department of Justice has officially notified the court handling the bankruptcy of BlockFi that it has seized assets as part of the criminal cases against crypto exchange FTX and its executives.
In a Jan. 6 court filing, the Justice Department said it had seized 55,273,469 shares of Robinhood — worth more than $450 million at the time of publication — to which former FTX CEO Sam Bankman-Fried, BlockFi and FTX creditor Yonathan Ben Shimon had previously made claims. The DOJ noted it had also taken control of more than $20 million in U.S. currency from the brokerage firm ED&F Man Capital Markets.
“The charges in the Indictment arise from an alleged wide-ranging scheme by the defendant to misappropriate billions of dollars of customer funds deposited onto FTX, the international cryptocurrency exchange founded by Bankman-Fried,” said the court filing. “The Indictment includes forfeiture allegations, seeking to forfeit property that constitutes or was derived from proceeds traceable to the conspiracy to commit wire fraud, wire fraud, and property involved in the conspiracy to commit money laundering.”
Reports from Jan. 4 had suggested the Justice Department was in the process of seizing the Robinhood shares as part of the case against FTX. Bankman-Fried’s legal team confirmed on Jan. 5 that the DOJ had moved forward with seizing the shares, but still argued the former FTX CEO had a claim to the assets “to pay for his criminal defense”.
Following his arrest in the Bahamas and extradition to the United States in December, Bankman-Fried pleaded not guilty to eight criminal charges including wire fraud and violations of campaign finance laws. Former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang have already pleaded guilty to related charges. SBF’s criminal trial is scheduled to begin in October.
Bankruptcy proceedings for FTX separate from the criminal cases are also ongoing, with the next public hearing scheduled for Jan. 11. Parties representing FTX debtors have also pointed to assets connected to the crypto exchange and its former executives as many customers look to recover lost and missing funds.