On Wednesday, Robinhood Markets revealed that it would attempt to purchase back shares bought by Sam Bankman-Fried, ex-CEO of the now-bankrupt crypto exchange FTX. The Bankman-Fried’s 7.5% stake in the firm has been a contested factor in FTX’s bankruptcy case and his criminal case.
Vlad Tenev, Robinhood CEO, says that buying the shares would keep shareholders away from distractions. The firm’s boss also announced that the board of directors had already approved the purchase of Bankman-Fried’s shares which are approximately 56 million.
Following the announcement, Robinhood shares have seen an increase of about 6% in the past 24 hours, according to data from TradingView. While the firm is working with the US Justice Department, Robinhood didn’t reveal the exact date when this buy would be complete.
Bankman-Fried, together with Gary Wang, FTX co-founder, bought the Robinhood shares in May 2022 through their firm, Emergent Fidelity. A document presented in court in December showed that the pair took loans from Bankman-Fried’s trading company, Alameda Research, amounting to over $545 million, to buy the shares.
Also read:BlockFi and Its Attempts to Secure SBF’s Shares
Last month, the Justice Department announced that it had taken custody of the shares worth $460 million at that time. However, BlockFi, a bankrupt crypto lender, has been trying to get hold of those shares, alleging Bankman-Fried pledged them to the firm as collateral in early November.
The filing came a day after the crypto lender filed for bankruptcy due to liquidity problems caused by its exposure to the fallen exchange, FTX, and Alameda Research. Additionally, BlockFi’s complaint alleges that Emergent Fidelity and a New-York based firm, ED&F Man, had custody of collateral belonging to the crypto lender.
Meanwhile, Sam Bankman-Fried’s attorneys have filed a request to keep hold of those shares, claiming they will help him to shoulder his criminal defense. Further, they argue that FTX’s debtors’ requests to secure the shares should be rejected since they have failed to present proof that they are entitled to the assets.
Robinhood is Optimistic About Crypto Despite Revenue Fall
Elsewhere, last year’s Robinhood’s revenue from crypto on its trading platform fell by 25% as prices dropped significantly. However, the firm says it is encouraged by the recent rally that began at the year’s start. Moreover, Robinhood continues to believe that crypto is not going away any time soon.
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