By
Bena Ilyas
April 18th, 2024
The DoJ believes SBF engaged in a year-long fraud business that cost investors and customers billions of dollars.
The United States Department of Justice (DOJ) is, ostensibly, preparing to seize and liquidate Sam Bankman-Fried’s (SBF) 56 million Robinhood Markets Inc (NASDAQ: HOOD) shares valued at approximately $465 million. Notably, SBF purchased approximately 7.42 percent of HOOD stock via Emergent Fidelity Technologies Ltd, using funds borrowed from Alameda Research, according to an affidavit he filed in December in an Antigua court.
According to media outlet Reuters, US attorney Seth Shapiro told US Bankruptcy Judge John Dorsey – who is overseeing the FTX bankruptcy – that SBF’s stake in Robinhood are proceeds of FTX. As such, the United States attorney thinks the $465 million should be seized and shared between FTX stakeholders including BlockFi.
SBF pleaded not guilty to fraud charges filed against him in a United State court and the hearing has been set for October.
However, experts say SBF will be fighting a steep legal battle after his close FTX and Alameda counterparts Caroline Ellison and Gary Wang pleaded guilty to fraud charges.
Moreover, Ellison and Wang have agreed to fully cooperate with government prosecutors against SBF.
“It’s going to be a very tough task for Bankman-Fried to ultimately prevail at trial. And while Bankman-Fried could be hoping for leniency, he may end up with a more severe sentence than he originally bargained for,” Mark A. Kasten, a partner at law firm Buchanan Ingersoll & Rooney PC Counsel, noted.
SBF Threatens to Pull Down Crypto Market
The cryptocurrency market has taken a nosedive since the collapse of FTX and its native token FTT. With billions of dollars vaporized from the FTX implosion, regulators are keen to pounce hard on predatory crypto projects.
The entire industry’s credibility is cratering b/c of fraudsters like @SBF_FTX and other bad actors. We have members of Congress talking about banning crypto w/an SEC Chair ready to pounce on the good guys while conspiring w/the bad guys. Let’s not do this. How about a zoom call?
— John E Deaton (@JohnEDeaton1) January 2, 2023
Several crypto companies that were exposed to FTX and Alameda have since collapsed or are on the verge of filing for bankruptcy. As such, SBF investigators have an uphill task to tackle a rogue FTX balance sheet that included FTT as assets. Furthermore, the DoJ believes SBF engaged in a year-long fraud business that cost investors and customers billions of dollars.
Following the FTX’s collapse, market strategists are worried the market may plummet further in the coming quarters before rebounding. A long crypto winter eventually reciprocates to job loss as trading volume decreases over time. Furthermore, Coinbase warned in its Q4 earnings results that crypto trading volume is expected to fall further in 2023. Additionally, SBF had indicated before the FTX collapse that most cryptocurrency exchanges are silently struggling to stay liquid.
According to our latest crypto price oracles, Bitcoin (BTC) is exchanging for around $16,813, up 1.7 percent in the past seven days.