Robinhood, the cryptocurrency and stock trading platform, has made a significant move by acquiring over 55 million shares that were formerly owned by Sam Bankman-Fried, known as SBF, the ex-CEO of FTX.
In a recent blog post on August 31, Robinhood disclosed that it successfully completed the purchase of 55,273,469 shares for an estimated cost of $606 million, following an official filing with the U.S. Securities and Exchange Commission (SEC).
These shares were originally held by Bankman-Fried and Gary Wang through their company Emergent Fidelity Technologies, but were confiscated by the U.S. Department of Justice in January.
The acquisition had been anticipated, as Robinhood’s board of directors had approved the deal in the company’s Q4 2022 report.
An SEC filing on August 30 confirmed that the U.S. District Court for the Southern District of New York had granted approval for the purchase, liberating the shares from any claims, liens, or encumbrances.
The transaction was facilitated through an agreement with the U.S. Marshals Service.
Jason Warnick, the Chief Financial Officer of Robinhood, expressed satisfaction with the successful completion of the share acquisition.
He voiced the company’s eagerness to continue realizing growth plans for the benefit of both its customers and shareholders.
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Bankman-Fried’s holding company, Emergent Fidelity Technologies, filed for bankruptcy in February, with its financial troubles exacerbated by its involvement with crypto lending firm BlockFi.
The latter faced its own bankruptcy situation following the downfall of FTX.
Notably, BlockFi had initiated legal action to claim ownership over the 55 million Robinhood shares that had been pledged as collateral.
This situation unfolded amid bankruptcy proceedings for FTX, and legal battles involving SBF, BlockFi, and FTX creditor Yonathan Ben Shimon over control of the approximately $600 million worth of Robinhood shares.
Bankman-Fried’s legal team argued that he had a right to these assets to fund his criminal defense.
Following the revocation of his bail on August 11, Bankman-Fried has been in custody, awaiting his first trial scheduled to commence on October 3.
In response to the acquisition news, the value of Robinhood shares on the Nasdaq stock exchange witnessed a rise of around 4%, climbing from $10.85 to $11.34.
Additionally, recent findings from crypto experts unveiled that Robinhood possessed the fifth-largest Ether wallet, with an estimated value surpassing $2.5 billion.
This development further underlines Robinhood’s presence and engagement in the cryptocurrency landscape.
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