According to a court document filed on Friday, Jan 20, federal prosecutors recovered over $700 million in cash and assets associated with Sam Bankman-Fried, mostly in the form of Robinhood shares that were owned by the former FTX CEO, reported first by CNBC.
In order to oversee FTX's restructuring, John Ray took over as CEO from Bankman-Fried. He is now working to recover the money that customers of the cryptocurrency company lost when it went bankrupt in November.
Bankman-Fried was detained in December on allegations of criminal fraud. He awaits trial and is currently on a $250 million bond.
This photo illustration shows a message reading We strongly advise against depositing on the website of cryptocurrency FTX, displayed near its logo, in Washington, DC, on November 13, 2022. - The new chief executive of troubled cryptocurrency platform FTX said on November 12, 2022, the company was making "every effort to secure all assets" following unauthorized transactions potentially worth hundreds of millions of dollars. Additionally, the platform's chief executive, 30-year-old Sam Bankman-Fried, once considered a star in the freewheeling cryptocurrency world, resigned.
Allegedly Stolen Customer Money
According to federal authorities, the Robinhood shares were bought with allegedly stolen customer money. Bankman-Fried stated that Robinhood was an appealing investment when he disclosed in May that he had bought a 7.6% share in the company.
The shares that were recovered were valued at almost $526 million when the stock closed Friday at $9.52, as per CNBC.
However, the former CEO has refuted allegations that it stole money from clients.
Three of the confiscated accounts, each totaling more than $6 million, were held at Silvergate Bank in the name of FTX Digital Markets. The government "on or about" Jan. 11 assumed ownership of the assets, which were registered in the name of a Bahamian company.
The fourth quarter of 2022 saw a roughly 70% decline in consumer deposits, according to the latest information from Silvergate.
According to the court document, Moonstone Bank, a US financial institution connected to FTX management, held about $50 million custody.
However, the amount of money or property in one Binance account and two US account numbers was not disclosed by federal prosecutors. The only confiscated assets without values were those three Binance accounts.
DOJ Tracks Robinhood Stocks
The US Department of Justice (DOJ) also tracked down Sam Bankman-Fried and Gary Wang's Robinhood shares to a holding company in the UK last Jan. 10.
Both executives allegedly purchased this enormous $455 million worth of Robinhood stock using investor funds.
The DOJ is in charge of more than 55 million dollars worth of Robinhood stocks, and Bankman-Fried and Wang continue to be the subject of ongoing inquiries.
FTX lawyers also announced on Jan. 11 that they retrieved about $5 billion in liquid assets.
The crypto exchange's lawyers also noted that the $5 billion cache was so massive that trying to sell the assets could produce severe market negative pressure and lower its value.
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