Online trading platform Robinhood announced the repurchase of 55 million shares previously held by Sam Bankman-Fried (SBF), the disgraced founder and former CEO of the now-bankrupt FTX exchange.
Robinhood Buys Back SBF’s Stake
In a recent filing with the United States Securities and Exchange Commission (SEC), Robinhood stated that it entered into a Share Purchase Agreement with the United States Marshal Service (USMS) to buy back the 55.3 million shares at $10.96 each for a total of $606 million. The sale of the shares was approved by the United States District Court for the Southern District of New York and completed on August 31.
“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,” Jason Warnick, Chief Financial Officer of Robinhood, said in a statement.
SBF had previously acquired 55 million shares of Robinhood in May 2022 through his holding company, Emergent Fidelity Technologies. Earlier this year, the United States Department of Justice (DOJ) seized the shares on claims that they did not belong to FTX bankruptcy estate and did not need to be frozen like other assets belonging to the crypto exchange. The federal agency also stated that competing claims to shares could be better resolved through forfeiture proceedings.
Competing Claims
Amid FTX’s bankruptcy proceedings, three parties, including BlockFi, FTX creditor Yonathan Ben Shimon, and SBF himself, had been battling for control of the shares. While SBF stated that he wanted access to the stock to help pay for his legal fees, BlockFi argued that SBF had pledged the Robinhood shares as collateral for a loan to his trading firm, Alameda Research.
SBF is facing multiple federal fraud charges for his alleged role in the collapse of FTX. He is currently in detention at Brooklyn’s Metropolitan Detention Center after Judge Lewis Kaplan recently revoked his $250 million bail bond over witness tampering.
