Where did the $700 million Sam Bankman-Fried seized from the US government come from?

Court documents detail that the U.S. government seized a series of bank accounts belonging to Bankman-Fried, containing millions in cash.

U.S. government seizes millions in cash and Robinhood stock from FTX co-founder; SBF denies misappropriation of customer assets

The U.S. government has seized nearly $700 million from former FTX CEO and co-founder Sam Bankman-Fried (SBF), according to court documents reviewed by CNBC. Most of the funds came from the 56,273,269 Robinhood shares owned by Bankman-Fried. Using January 20, 2023 exchange rates, Hood’s shares are worth more than $526 million.

In addition, CNBC reporters Rohan Goswami and MacKenzie Sigalos detail that nearly $56 million held in four bank accounts was also seized. Three accounts holding $6 million were reportedly held at Silvergate Bank and one account was reportedly held at Moonstone Bank for $50 million. In total, the federal government seized $171 million in cash from Bankman-Fried. Moonstone Bank explained on January 19, 2023, that the financial institution will officially withdraw from the crypto space.

Alameda Research invested $11.5 million in Moonstone Bank, also known as Farmington State Bank, through FBH, Moonstone’s holding company. Federal prosecutors believe the $697 million in assets, mostly Robinhood stock, were acquired with funds stolen from FTX customers. Bankman-Fried maintains his innocence and has “denied misappropriating client assets“, Sigalos explained on Friday.

In addition, federal agents also seized funds belonging to SBF that were held on crypto-currency exchanges Binance and Binance US. The U.S. government revealed its intentions to seize Robinhood’s shares in the first week of January 2023, and the U.S. Department of Justice (DOJ) has initiated the process.

Bankman-Fried tried to regain access to the shares, indicating that he needed the money to pay his legal fees. The U.S. government can seize funds from citizens suspected of wrongdoing without necessarily charging them with a crime and from suspects who are awaiting trial. Federal prosecutors do not believe that the seized assets are the property of the bankruptcy estate.