DOJ seizing millions in Robinhood shares linked to FTX, lawyer says 

Quick Take

  • The Justice Department is seizing $450 million in Robinhood shares linked to FTX founder Sam Bankman-Fried.
  • Failed crypto lender BlockFi, Bankman-Fried and an FTX creditor had all sought to gain control of the shares before the U.S. government seized them this week.

The Justice Department is in the process of seizing hundreds of millions of dollars in Robinhood shares linked to FTX, a lawyer said during a Delaware court proceeding on Wednesday. 

A New York court ordered federal officials to seize a number of assets in connection with the criminal case against FTX founder Sam Bankman-Fried. The former crypto boss pleaded not guilty to fraud charges this week. 

The Robinhood Markets shares are worth about $450 million. The disgraced former CEO owns 90% of Emergent Fidelity Technologies, an entity that owns 56 million shares in Robinhood stock. Bankman-Fried stepped down as FTX CEO when the firm filed for bankruptcy protection in November,

Seth Shapiro, senior trial counsel for the Justice Department, told a bankruptcy court judge that the Robinhood shares are also linked to a separate bankruptcy case filed by failed crypto lender BlockFi in New Jersey.

“We did want the court to know about those seizures,” Shapiro said. “We either believe that these assets are not the property of the bankruptcy estate, or that they fall within the exceptions … of the bankruptcy code.” 

Bankman-Fried, BlockFi and an FTX creditor have all sought to control the Robinhood shares. 


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The seized Robinhood assets are from accounts that the FTX debtors do not control, said James Bromley, a lawyer for the troubled crypto exchange. He stressed that the owner of the Robinhood shares was unclear even before the seizure began, pointing to proceedings underway in Antigua and Barbuda that are linked to the assets. 

“The ownership of those Robinhood shares was an open question before the seizure took place,” Bromley said. “Those shares were already at issue.”

The Justice Department plans to file a notice of seizure to clearly disclose what assets the government has in its possession, Shapiro noted. Assets seized will be subject to future criminal or civil asset forfeiture proceedings. 

During the bankruptcy scheduling conference, a judge agreed to move pending matters in the case to Jan. 13. The court also delayed the U.S. Trustees’ motion to appoint an independent examiner to Jan. 20.

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Stephanie is a senior reporter covering policy and regulation. She is focused on legislation, regulatory agencies, lobbying and money in politics. Stephanie is based in Washington, D.C.


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