Sam Bankman-Fried’s lawyers claim he needs Robinhood shares ‘to pay for his criminal defense’

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The legal team for for­mer FTX CEO Sam Bankman-Fried has filed a motion in an effort to stop the exchange’s debtors from con­trol­ling more than $450 mil­lion worth of shares of Robinhood.

In a Jan. 5 court fil­ing regard­ing FTX’s bank­rupt­cy case, Bankman-Fried’s lawyers said FTX debtors had “failed to car­ry their heavy bur­den” estab­lish­ing that they had a legal claim to more than 56 mil­lion Robin­hood shares. The legal team con­firmed reports that the Unit­ed States Depar­ture of Jus­tice was in the process of seiz­ing the shares, but said SBF was “com­pelled to reply” giv­en the stakes sur­round­ing the assets.

“Mr. Bankman-Fried has not been found crim­i­nal­ly or civil­ly liable for fraud, and it is improp­er for the FTX Debtors to ask the Court to sim­ply assume that every­thing Mr. Bankman-Fried ever touched is pre­sump­tive­ly fraud­u­lent,” said the fil­ing, refer­ring to the Robin­hood shares. “The FTX Debtors have not shown that they have a rea­son­able like­li­hood of suc­ceed­ing on the mer­its of a fraud­u­lent trans­fer claim.”

The court fil­ing cit­ed U.S. author­i­ties’ crim­i­nal case against Bankman-Fried, in which he faces eight crim­i­nal counts, includ­ing wire fraud and vio­la­tions of cam­paign finance laws. Accord­ing to his lawyers, SBF “requires some of these funds to pay for his crim­i­nal defense.” They cit­ed case law in which with­hold­ing funds could “con­sti­tute irrepara­ble harm” to one’s defense. 

Bankman-Fried claimed in Decem­ber — pri­or to his arrest in the Bahamas and extra­di­tion to the U.S. — that he had only had $100,000 left in his bank account. How­ev­er, two indi­vid­u­als whose per­son­al infor­ma­tion has been redact­ed from pub­lic doc­u­ments have also signed on to be sureties for his $250-mil­lion bond, along with his parents.

The for­mer FTX CEO has plead­ed not guilty to all charges, and his tri­al is expect­ed to begin in Octo­ber. As a con­di­tion of his bail, a fed­er­al judge ordered Bankman-Fried not to access or trans­fer any cryp­tocur­ren­cy or assets from FTX or Alame­da. On-chain data had sug­gest­ed funds from Alame­da wal­lets were being moved amid the court cases.

Relat­ed: FTX founder report­ed­ly cash­es out $684K after being released on bail

Though the U.S. Jus­tice Depar­ture may soon have con­trol of all of the Robin­hood shares, FTX, Block­Fi and Bankman-Fried have sep­a­rate­ly pre­vi­ous­ly staked claims for dif­fer­ent rea­sons. Block­Fi filed a suit in Novem­ber claim­ing the stocks were put up as col­lat­er­al for the firm’s loans to Alame­da Research, while FTX has argued the shares should be con­trolled by the firm while the bank­rupt­cy case proceeds.

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