US authorities decide to seize 56M Hood shares in FTX bankruptcy case
In the FTX exchange bankruptcy case, the Court judge decided to freeze the 56 million Robinhood shares (HOOD).
FTX was a popular Crypto exchange but collapsed badly in the first week of Nov 2022. Sam Bankman-Fried (SBF), co-founder & former CEO of FTX, used the FTX customer’s funds for personal benefits and also funded a huge amount of money to his Crypto hedge platform Alameda Research. Due to lack of funds availability, FTX exchange failed to give withdrawal of the funds to all the users and finally on 11 Nov filed for bankruptcy in a US district court.
Recently Seth Shapiro, Counsel at the Department of Justice (DOJ), said in the bankruptcy court hearing in Delaware that the Department of Justice (DOJ) doesn’t believe that Robinhood shares (HOOD) were the property of a bankruptcy estate, so now US authorities are moving to freeze the $460 million worth of Robinhood Markets Inc.
The outcomes of the bankruptcy proceedings will confirm in the end, which party will gain control of this amount of shares.
In the present time, bankrupt crypto lender BlockFi, FTX creditor Yonathan Ben Shimon and Bankman-Fried, are in dispute to gain control of these shares. All these three parties filed a dedicated motion in the court to access the control of these HOOD funds.
John J. Ray III is the current CEO of the FTX exchange and he is working his best to collect all the funds, which were transferred illegally on behalf of the former FTX officials. FTX also filed a motion in the court to freeze the Robinhood shares, as FTX exchange lost $8 Billion worth of customers’ funds.
Indeed these 56 million Robinhood shares were purchased through Emergent Fidelity Technologies Ltd, a company that was founded by FTX co-founder Gary Wang in May 2022. This company collected a $546 million loan from Alameda Research to purchase this big amount of HOOD shares.
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