Robinhood Acquires Sam Bankman-Fried’s Stake from U.S. Government for $606M

2:11 pm
September 2, 2023
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Robinhood, a leading cryptocurrency and stock trading platform, has completed the acquisition of over 55 million shares previously owned by former FTX CEO Sam Bankman-Fried, also known as SBF. The purchase was made for approximately $606 million, following the seizure of the shares by the U.S. Department of Justice in January.

The acquisition was approved by Robinhood’s board of directors and received the green light from the U.S. District Court for the Southern District of New York, allowing the purchase to proceed without any claims or encumbrances. The deal was made through a repurchase agreement with the U.S. Marshals Service, and the shares were originally held by Bankman-Fried and FTX co-founder Gary Wang through Emergent Fidelity Technologies.

“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 CFO Jason Warnick.

Sam Bankman-Fried’s holding company, Emergent Fidelity Technologies, filed for bankruptcy in February and had pledged the Robinhood shares as collateral. The ownership of the shares had been the subject of legal battles among Bankman-Fried, BlockFi, and FTX creditor Yonathan Ben Shimon. Bankman-Fried’s legal team argued that he needed the assets to pay for his criminal defense.

Following the acquisition, the price of Robinhood shares on Nasdaq increased by approximately 4%, from $10.85 to $11.34. It was recently revealed that Robinhood is also the owner of the fifth-largest Ether (ETH) wallet, holding more than $2.5 billion worth of the cryptocurrency.

Frequently Asked Questions (FAQ)

Who is Sam Bankman-Fried?

Sam Bankman-Fried is the former CEO of FTX, a cryptocurrency exchange.

Why were Sam Bankman-Fried’s shares seized?

The shares were seized by the U.S. Department of Justice in January, but the specifics of the seizure have not been disclosed in the article.

What is the significance of Robinhood acquiring Bankman-Fried’s shares?

The acquisition allows Robinhood to regain control of the shares and execute its growth plans for the benefit of its customers and shareholders.

Summary

Robinhood has purchased over 55 million shares previously owned by former FTX CEO Sam Bankman-Fried, amounting to approximately $606 million. The shares, which were seized by the U.S. Department of Justice, have now been transferred to Robinhood through a repurchase agreement with the U.S. Marshals Service. The acquisition enables Robinhood to move forward with its growth plans and saw the price of Robinhood shares increase on Nasdaq.


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