• Federal prosecutors seized almost $700 million in assets and cash connected to Sam Bankman-Fried, primarily Robinhood shares.
• SBF denied any misappropriation of customer assets, however the assets were held in Silvergate Bank, under FTX Digital Markets, the Bahamian subsidiary of the exchange.
• The move was the first concrete action by regulators to hold him accountable for the billions that went down with the exchange.
In November 2021, the collapse of FTX caused a stir throughout the crypto industry, leaving Sam Bankman-Fried (SBF) with nearly nothing. This came after a series of other exchanges and funds associated with FTX, such as Alameda Research and BlockFi, had also gone down. As a result, SBF was arrested in the Bahamas, where he was released on a $250 million bond. Following this, federal prosecutors seized almost $700 million in assets and cash connected to SBF, primarily Robinhood shares.
SBF had announced in May 2022 that he had purchased a 7.6% stake in Robinhood, which he said was an attractive investment. However, the government believes he purchased the shares with customer funds, a claim that he denies. The accounts were held in Silvergate Bank, under FTX Digital Markets, the Bahamian subsidiary of the exchange, with over $6 million. This move was the first by regulators to hold SBF accountable for the billions that had gone down with the exchange, and it has cost him not only his assets, but also several professional ties due to people not wanting to be associated with him and his ongoing saga.
The aftermath of this seizure has been far reaching, and it remains to be seen what the consequences will be for SBF and his associates. It has already been confirmed that the assets and cash seized will be used to pay creditors and compensate customers affected by the collapse of FTX. However, the severity of the situation has not been lost on the wider crypto industry, and it has led to a heightened awareness of the need for stricter regulation of crypto exchanges and better protection for customer funds.