(Dmytro “Henry” Aleksandrov, Headline USA) Sam Bankman-Fried, the disgraced founder of the once-flush FTX cryptocurrency empire, asked a federal judge to allow him to access his $465 million worth of shares in Robinhood because he needs to pay for his legal fees with cash.
On Thursday night, Bankman-Fried’s attorneys made the request in motion with the judge overseeing FTX’s bankruptcy, saying that $56.3 million Robinhood shares are owned by an entity that is not a party to the proceedings, according to the Daily Mail.
Bankman-Fried, who used to be worth $15.6 billion, now says he has only about $100,000 in cash reserves left after his cryptocurrency empire collapsed and he was charged with fraud.
Earlier this week, he pled not guilty to eight federal counts of fraud and conspiracy and now he faces a costly legal battle if the matter goes to trial.
“Bankman-Fried requires some of these funds to pay for his criminal defense,” the motion requesting the release of the shares said.
Bankman-Fried’s lawyers said that Emergent Fidelity Technology, a company controlled by Bankman-Fried, owns the Robinhood shares. Emergent is not a party to the bankruptcy, so a prior request from the FTX debtors to freeze the shares should be rejected by the court, the lawyers argued.
The motion acknowledged, however, that the question is moot for practical purposes because U.S. Justice Department already seized the shares as part of the criminal case against Bankman-Fried. U.S. prosecutors confirmed Wednesday that they are working on seizing the Robinhood shares.
US attorney Seth Shapiro told US Bankruptcy Judge John Dorsey, who is overseeing the FTX bankruptcy, that the DOJ did not believe the 56 million shares of Robinhood, worth about $465 million, were property of a bankruptcy estate.
He also said that it could be possible to work out the competing claims to shares of the stock-trading app in a forfeiture proceeding.
According to an affidavit Bankman-Fried filed in December in an Antigua court, using funds borrowed from Alameda Research, he purchased about 7.42 percent of Robinhood’s stock through Emergent Fidelity Technologies Ltd.