Online broker Robinhood is going to buy back the stake purchased by a company of crypto exchange FTX founder Sam Bankman-Fried (SBF). The fintech intends to pay $605.7 million for the shares that were transferred to the custody of the U.S. government after the bankruptcy of SBF’s businesses.
Robinhood to Proceed With Planned Buyback of Shares From USMS
Online stock and crypto brokerage Robinhood Markets announced on Friday it had entered into a stock repurchase agreement with the United States Marshals Service (USMS) for shares acquired by crypto entrepreneur Sam Bankman-Fried’s Emergent Fidelity Technologies.
The stock was seized after FTX and Emergent filed for bankruptcy in 2022 and later transferred to the custody of the U.S. government, Reuters noted in a report. The collapse of the exchange, one of the largest in the crypto space, led to the arrest and indictment of SBF, whose trial on fraud and conspiracy charges is set to begin in October.
The Menlo Park, California-headquartered financial services firm is going to pay $605.7 million for 55.3 million shares. Robinhood first unveiled its plan to buy back the stake in February of this year after the company’s board authorized it to pursue purchasing most or all of the stock.
The deal was approved by U.S. District Judge Lewis Kaplan in Manhattan who oversees Sam Bankman-Fried’s case. In an order issued on Monday, he described Robinhood’s proposed share purchase agreement as “appropriate” and said it was “in the best interest of the relevant stakeholders.”
FTX collapsed amid liquidity issues and Bankman-Fried has been accused of misappropriating funds of the exchange’s customers worth billions of U.S. dollars to buy expensive property, make political donations, and finance his other businesses such as the Alameda Research hedge fund.
The crypto mogul announced the purchase of a 7.6% stake in Robinhood Markets just six months before his company filed for bankruptcy in November. At the time, he said he had no intention to take control of the online broker but interest in partnering with the platform.
SBF was arrested in the Bahamas and extradited to the United States about a month after the collapse of FTX. He had been living under house arrest at his parents’ home in California before his $250 million bond was revoked and he was jailed in August for alleged witness tampering.
What do you think about Robinhood’s decision to buy back its shares? Let us know in the comments section below.
