Originally Published: 05 JAN 23 09:26 ET

By Allison Morrow and Kara Scannell, CNN

(CNN) -- The US government is stepping into a contentious, multijurisdictional legal battle over the ownership of hundreds of millions of dollars' worth of assets connected to the collapse of Sam Bankman-Fried's crypto empire.

The Justice Department said Wednesday that has moved to seize millions of shares of Robinhood, the popular stock-trading app, whose ownership is disputed by several parties, including Bankman-Fried himself, his bankrupt crypto exchange FTX and another bankrupt crypto company.

"We believe that these assets are not property of the bankruptcy estate or that they fall within the exceptions... of bankruptcy code," Seth Shapiro, a Justice Department attorney, said during a bankruptcy hearing in Delaware Wednesday.

Four separate entities have laid claim to the approximately 56 million shares, worth about $450 million. FTX's new management, which is trying to claw back funds for investors and customers of the bankrupt platform, have sought to wrest control of the shares from an Antigua-based holding that company 90% owned by Bankman-Fried.

In May 2022, a few months before his companies collapsed and he was charged with defrauding his customers and investors, Bankman-Fried acquired a nearly 8% stake in Robinhood via a holding company he set up with FTX co-founder Gary Wang. That company, Emergent Fidelity Technologies, borrowed more than $546 million from crypto hedge fund Alameda Research, according to an affidavit Bankman-Fried filed in December.

Bankman-Fried claims ownership of the shares, seeking a source of payment for legal expenses, according to FTX. Also claiming the Robinhood shares are bankrupt crypto lender BlockFi and an individual FTX creditor.

Because the competing claims, FTX filed a motion earlier this month to the Delaware bankruptcy court to keep the assets frozen until the court "can resolve the issues in a manner that is fair to all creditors of the debtors."

At the Wednesday hearing, FTX lawyer James Bromley said that while "we certainly believe we have rights with respect to those assets...we are in alignment at the present time with the US government and the law enforcement officials in taking these steps."

Robinhood did not immediately respond to a request for comment. The company's CEO Vlad Tenev told CNBC last month that he's "not surprised" the stake is one of the more valuable assets on FTX's books because it is a public company's stock.

"We don't have a lot of information that you guys don't have," Tenev told CNBC. "We're just watching this unfold and ... it's going to be locked up in bankruptcy proceedings, most likely for some time."

US prosecutors accuse Bankman-Fried of stealing customer funds from FTX to cover losses at Alameda, as well as to make investments in other companies, subsidize his luxury lifestyle, and make huge campaign donations to Democrats and Republicans in the United States.

He pleaded not guilty to eight federal counts of fraud and conspiracy on Tuesday, and remains under house arrest at his parents' home in Palo Alto, California.

Two of his former associates, however, have emerged as star witnesses for the prosecution. Both have pleaded guilty to fraud, directly contradticting Bankman-Fried, and are cooperating with prosecutors from the Southern District of New York.