Prosecutors told a U.S. bankruptcy judge they are in the process of seizing shares of Robinhood, the popular securities trading app, that were pledged as loan collateral by Alameda Research, the crypto hedge fund founded by Bankman-Fried.

Alameda filed for U.S. bankruptcy in November along with its affiliate FTX after customers rushed to withdraw funds.

Bankman-Fried has pleaded not guilty to fraud over the loss of potentially billions of dollars by FTX customers, investors and lenders.

Bankman-Fried owned about 56 million shares or about 7.42% of Robinhood stock through Emergent Fidelity Technologies Ltd, according to Eikon data.

(Reporting by Tom Hals in Wilmington, Delaware; Editing by Sandra Maler)