Justice Department seizes $170 million in cash from troubled FTX cryptocurrency firm

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Justice Department seizes $170 million in cash from troubled FTX cryptocurrency firm

The Justice Department has seized $170 million in cash from FTX as part of the criminal investigation into the disgraced cryptocurrency executive Sam Bankman-Fried. The U.S. Attorney for the Southern District of New York, Damian Williams, said in a court filing Friday that the money has been taken over the past several weeks from accounts in a global brokerage firm, a crypto bank and a tiny Washington state-based bank that has ties to FTX's management. All of it was in U.S. dollars, not cryptocurrency, and is being held by the government as a criminal case against Bankman-Fried proceeds.

After more than three years as a top-notch cryptocurrency firm, FTX decided to declare bankruptcy in November following a catastrophic collapse of its exchange and companion currency. The Justice Department charged Bankman-Fried with eight counts of fraud, money laundering and other crimes. Bankman-Fried has pleaded not guilty and remains under house arrest in his parents' home in Palo Alto, Calif.

The Southern District also said it had taken about 55 million shares of the trading platform Robinhood, which it had previously said it would do.

While Bankman-Fried's past personal access to the funds is not clear, the sums could contradict Bankman-Fried's statements in November that he was down to $100,000 in assets.

The government could also seize the holdings in three Binance accounts whose value was not disclosed.

It is possible that some of the money may be surrendered to the defendant to pay legal fees. Bankman-Fried's lawyers have argued that he needs the proceeds from the Robinhood stock to work just that, if any, at all.

The company's restructuring leadership is also pursuing a bid to track down FTX assets as part of bankruptcy proceedings. The new FTX chief executive, John J. Ray, with the help of New York law firm Sullivan & Cromwell, recently said that about $5.5 billion of a missing $8 billion in assets have been located.

On Friday, the judge presiding in the case, John Dorsey, rejected a bid by two FTX creditors to remove the law firm. Sullivan & Cromwell had disclosed last month that it had earned nearly $9 million working for Bankman-Fried's company and that it once hired FTX U.S. general counsel Ryne Miller, leading to concerns of a conflict of interest in the creditor action.