SBF Claims Robinhood Shares Necessary for Personal Legal Defense

The shares, once worth more than $600 million, have plunged since they’ve been stuck in legal limbo

article-image

HDmytro/Shutterstock modified by Blockworks

share

Sam Bankman-Fried is fighting to retain control of his some $450 million worth of Robinhood stock prosecutors staked claim over on Wednesday, a new court filing shows. 

The Department of Justice, which moved to take custody of the shares Wednesday, claims the stock should not be included in FTX’s bankruptcy proceedings. Meanwhile, FTX’s creditors hope the shares can help make them whole, and Bankman-Fried said he needs the funds to cover his legal fees.  

“Mr. Bankman-Fried requires some of these funds to pay for his criminal defense,” the filing read, noting that the disgraced FTX founder is “facing potential criminal liability.” Bankman-Fried pleaded not guilty to all charges, including wire fraud and campaign finance violations, in New York Tuesday. 

Bankman-Fried’s move is the latest in an ongoing ownership dispute over the shares. The equities, once worth more than $600 million, have plunged since they’ve been stuck in legal limbo. 

More than 56 million Robinhood shares are on the line, worth a little more than $450 million as of Friday’s prices, Thursday’s court filing revealed. The shares belong to Emergent Fidelity Technologies, of which Bankman-Fried is the 90% stockholder, the filing added. 

In May 2022, “Mr. Bankman-Fried and Zixiao (“Gary”) Wang borrowed the funds for Emergent to purchase the Robinhood Shares from Alameda,” the filing read. 

Representing Bankman-Fried in the bankruptcy proceedings is Gregory T. Donilon from Montgomery McCracken Walker & Rhoads LLP. 

Bankman-Fried’s criminal lawyers are Cohen & Gresser’s Christian R. Everdell and Mark Stewart Cohen, who recently represented Ghislaine Maxwell in her sex trafficking case. 

Bankman-Fried’s personal legal fees are not public, but Sullivan and Cromwell LLC, the firm leading FTX’s restructuring, accepted a $12 million retainer from the exchange before it filed for Chapter 11 on Nov. 11, 2022. As of Nov. 3, 2022, the firm had already cashed in more than $3.4 million of its retainer, nearly 30%.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

recent research

Pyth Cover.jpg

Research

Pyth is a low latency pull-based oracle. In a future that looks increasingly high frequency, with various alt L1s and L2s that have significantly shorter block times than Ethereum, and an explosion of “high-frequency” protocols such as oracle or CLOB perp DEXs, Pyth’s low latency oracle product looks much better positioned to capture a significant amount of market share in comparison to competitors.

article-image

Binance settlement “an important part of clearing the way for the next bull market cycle,” crypto hedge fund executive says

article-image

Hester Peirce reiterated Tuesday that court cases are not the only path to regulatory clarity for crypto, but her colleagues do not always agree

article-image

The indictment followed leaks Monday that a Binance settlement deal was forthcoming

article-image

The Binance executive is also reportedly set to make an appearance in a Seattle courtroom Tuesday

article-image

Monday developments reaffirmed the US as unfriendly to crypto while also offering a potential bullish outlook for segment firms, industry watchers say

article-image

It’s unclear what “actions” the CFTC, DOJ and Treasury will announce Tuesday afternoon