Robinhood Bought Back Sam Bankman-Fried’s Stake From US Gov’t for $606M – Robinhood, the cryptocurrency and stock trading platform, has revealed its acquisition of over 55 million shares previously owned by Sam Bankman-Fried, the former CEO of FTX, who is also known as SBF. In an August 31st blog post, Robinhood disclosed that it had finalized the acquisition of 55,273,469 shares for approximately $606 million, as reported in a filing with the United States Securities and Exchange Commission.
These shares, initially held by Bankman-Fried and FTX co-founder Gary Wang via Emergent Fidelity Technologies, had been confiscated by the U.S. Department of Justice in January. The purchase had been expected. Robinhood’s board of directors announced the approval of the deal in the company’s Q4 2022 report, and an Aug. 30 SEC filing said the U.S. District Court for the Southern District of New York had approved the purchase “free and clear of any claims, interests, liens and encumbrances.”
Robinhood made the repurchase agreement with the U.S. Marshals Service. “We are happy to have completed the purchase of these shares and look forward to executing on our growth plans on behalf of our customers and shareholders,” said Robinhood chief financial officer Jason Warnick. Bankman-Fried’s holding company, Emergent Fidelity Technologies, sought bankruptcy protection in February.
Prior to this, the company had faced legal action from crypto lending firm BlockFi, which filed for bankruptcy after the collapse of FTX, concerning the 55 million Robinhood shares used as collateral. Amid FTX’s bankruptcy proceedings, there were legal disputes involving SBF, BlockFi, and FTX creditor Yonathan Ben Shimon over the ownership of approximately $600 million worth of Robinhood shares. Bankman-Fried’s legal team argued that the former FTX CEO had a right to these assets for funding his criminal defense.
Currently in custody after his bail was revoked on August 11, Bankman-Fried is scheduled to face his initial trial on October 3. Following the purchase, the price of Robinhood shares on Nasdaq rose by approximately 4%, going from $10.85 to $11.34 at the time of this report. Additionally, recent investigations by cryptocurrency enthusiasts revealed that the company possesses the fifth-largest Ether wallet, valued at over $2.5 billion.