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Comment by belltaco | Hacker News Reader

The govt didn't buy the shares, they seized them. So it's all technically profit but they probably want to reimburse the scammed folks.

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As of today, SBF hasn’t been found guilty in any court of law.

Are the government typically allowed to seize and sell your assets and possibly redistribute the proceeds before you’ve even been to court?

What if he needed those funds for his legal defence?

> Are the government typically allowed to seize and sell your assets and possibly redistribute the proceeds before you’ve even been to court?

Yes, asset seizure is the norm for law enforcement in America.

> What if he needed those funds for his legal defence?

The money is in a limbo state, as it might be proceeds from crimes. The justice system doesn't want you using proceeds from crimes in any way, shape or form.

> asset seizure is the norm for law enforcement in America

Freeze and seizure, sure. Pre-trial disposal, no. In this case, the headline is being loose in that these aren't Bankman-Fried the natural person's shares, they're a bankrupt entity's. Selling a bankrupt entity's stuff is par for the course.

Is that true when the entity itself is fraudulent? At what point can we separate SBF & Co's fraud from the company itself?

This has nothing to do with his criminal trial, this has to do with his company filing for bankruptcy. If he didn't want the gov't to auction of his companies assets in order to satisfy his creditors... then he shouldn't have declared bankruptcy, as that's exactly what happens in a bankruptcy proceeding.

Is this part of bankruptcy or the criminal trial? It was the US marshals that sold it that sounds more like criminal asset forfeiture. I did not dig too deep but not immediately clear.

AFAICT he pledged them to BlockFi to try to stop a margin call, and they went bankrupt, so its just a question of which bankruptcy claims they are for.

What do you mean “reimburse the scammed folks”? Any holder of bitcoins would receive a share of their money back?

Whatever the FBI is up to, it’s most certainly not reimbursing the customers.

Not the customers, but FTX lenders investors. There are likely tons of lawsuits filed by them to claim their piece of the govt seized assets. Its up to the govt to decide whether to help customers or investors and lenders.

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