Bankman-fried, ceo of ftx, and john j. ray iii, new ceo of ftx, were involved in a legal dispute over bankman-fried’s 56 million shares of the consumer trading app robinhood, which are worth around $450 million. blockfi, a defunct crypto lender, also attempted to gain control of the shares by claiming they were pledged to it under the terms of an agreement made in november 2022. the united states department of justice obtained a warrant to seize the assets earlier this week.
Dispute began in december 2022, when ftx requested that the court overseeing the exchange’s bankruptcy freeze bankman-fried’s robinhood shares. bankman-fried acquired his 7.6% stake in robinhood via his holding company emergent fidelity technologies in may 2022, when the shares were worth around $600 million.
Argued that the assets should be frozen until the court could resolve the issues fairly, as many creditors were seeking ownership of the shares. bankman-fried’s representatives stated that he requires some of these funds to pay for his criminal defense, and u.s. case law states that the financial inability to defend oneself may constitute “irreparable damage” to the impacted party. however, the court filing admits that the requests by the debtors are now “moot” due to the department of justice’s warrant.