Market Analysis Report (23 Jan 2023)

Federal prosecutors have seized nearly $700 million in cash and assets connected to former FTX CEO Sam Bankman-Fried, primarily in the form of Robinhood shares that he owned.

The new CEO of FTX who has been guiding the exchange’s restructuring, John Ray, is said to be trying to rescue the funds that were lost by the cryptocurrency firm’s depositors when it went into bankruptcy.

The ownership of over 55 million Robinhood shares is currently at the center of a contentious dispute involving multiple parties, including Caribbean litigants, representatives of the bankrupt cryptocurrency lender BlockFi, Bankman-Fried, and the leadership of FTX’s bankruptcy.

Federal prosecutors have claimed that the shares were bought using funds that were allegedly stolen from customers. In May, Bankman-Fried announced that he had acquired a 7.6% stake in Robinhood, stating that “we think it is an attractive investment.”

Bankman-Fried has denied any allegations of misusing customer assets. The government seized three accounts held at Silvergate Bank, under the name of FTX Digital Markets, containing over $6 million.

Almost $50 million of the assets were custodied at Moonstone Bank, a U.S. financial institution with ties to FTX’s management. Prosecutors did not disclose the value of funds held at one Binance account and two Binance.US accounts.

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