At an FTX bankruptcy hearing on Wednesday, US prosecutors told the court they are seizing Robinhood shares pledged as loan collateral by Alameda Research. Later on the same day, a federal judge ordered the seizure of more than $90 million held by FTX Digital Markets in its Silvergate accounts up until now.

US Prosecutors Move to Seize Alameda Research-Related Robinhood Shares

At a bankruptcy hearing on Wednesday, US prosecutors told the court they were working to seize Robinhood shares associated with the bankrupt crypto exchange FTX. Reportedly, they are primarily targeting shares pledged by Alameda Research as loan collateral. 

Sam Bankman-Fried, the founder of both Alameda Research and FTX, had around 56 million shares of the online broker worth around $450 million. SBF stands accused of multiple charges of fraud and money laundering due to his running of the FTX Group and has recently pleaded not guilty to all charges. 

Alameda Research played a key role in the downfall of FTX. Soon after the bankruptcy, it was reported that it received billions of dollars worth of users’ assets as loans from FTX. Furthermore, the company’s CEO Caroline Ellison confirmed that Alameda facilitated and helped hide loans worth billions of dollars made to FTX’s executive in collusion with Sam Bankman-Fried.

Federal Judge Orders the Seizure of FTX Digital Market’s $93M Held in Silvergate Bank

Later on Wednesday, Silvergate Bank revealed in a court filing that a US federal judge ordered the seizure of $93 million held by FTX Digital Markets. The filings also state that Bahaman liquidators, that filed for a separate bankruptcy in New York, also ordered Silvergate to transfer FTX-associated money “to ensure the safety” of the assets.

Silvergate revealed that the Bahaman request was moot as FTX’s accounts were already seized. The island nation is also playing a strange role in the collapse of SBF’s crypto empire. Even before filing for bankruptcy, FTX attempted to blame Bahaman regulators for allowing certain withdrawals while most customers were blocked from accessing their funds. The regulators denied this claim. 

Not long after, a court filing made by FTX’s new management hinted at the possibility that Bahaman regulators might be behind the hack that drained the exchange of hundreds of millions of dollars shortly after its chapter 11 filing. Due to its close association with FTX, Silvergate found itself in hot water following the exchange’s collapse. On November 16th, it became the target of a class action lawsuit for “aiding and abetting FTX’s fraud”.

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