The U.S. Department of Justice (DOJ) has seized more than 55 million shares of Robinhood (HOOD) stock owned by Sam Bankman-Fried and FTX co-founder Gary Wang via a holding company, according to a court document.
In a court filing on Jan. 6, the Justice Department stated that it had confiscated 55,273,469 shares of Robinhood - worth more than $450 million at the time of publication - from former Bankman-Fried, BlockFi, and FTX creditor Yonathan Ben Shimon.
The DOJ also stated that it had taken custody of more than $20 million in U.S. currency from the brokerage business 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," the court filing said.
"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."
Through their holding firm Emergent Fidelity Technologies, Bankman-Fried and Wang were the legal owners of the Robinhood shares.
John Ray III, the current CEO of FTX, requested a stock freeze late last month.
Naturally, Bankman-Fried opposed the plan, claiming that, in part, he needed the shares to help cover his legal expenses.
On Wednesday, the U.S. authorities declared that it was in the process of seizing a variety of assets that might be connected to FTX.
Bankman-Fried's legal team confirmed on Jan. 5 that the DOJ had moved through with seizing the shares, but still contended the former FTX CEO had a claim to the assets "to pay for his criminal defense".
Bankman-Fried pleaded not guilty to eight criminal charges, including wire fraud and violations of campaign finance rules, after his detention in the Bahamas and extradition to the U.S. in December.
Caroline Ellison, former CEO of Alameda Research, and Wang have already pled guilty to related crimes. The criminal prosecution of SBF is set to begin in October.
Separate from the criminal prosecutions, FTX is also undergoing bankruptcy proceedings, with the following public hearing set for Jan. 11. The assets linked to the cryptocurrency exchange and its former executives have also been mentioned by parties representing FTX debtors, as many clients are trying to recover missing and lost funds.
