Robinhood Acquires Sam Bankman-Fried’s Stake, Valued at $606M, from the US Government
Cryptocurrency and stock trading platform Robinhood has announced the acquisition of more than 55 million shares owned by former FTX CEO Sam Bankman-Fried, also known as SBF.
As per an Aug. 31 blog post, Robinhood completed the purchase of 55,273,469 shares for approximately $606 million, following a filing with the United States Securities and Exchange Commission. These shares were originally held by Bankman-Fried and FTX co-founder Gary Wang through their company, Emergent Fidelity Technologies, but they were seized in January by the U.S. Department of Justice.
The acquisition was anticipated as it was approved by Robinhood’s board of directors in the company’s Q4 2022 report. An Aug. 30 SEC filing stated that the U.S. District Court for the Southern District of New York had approved the purchase “free and clear of any claims, interests, liens, and encumbrances.” Robinhood made the repurchase agreement with the U.S. Marshals Service.
“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’s chief financial officer, Jason Warnick.
Emergent Fidelity Technologies, Bankman-Fried’s holding company, filed for bankruptcy in February. The company had already become the target of crypto lending firm BlockFi, which filed for bankruptcy following the collapse of FTX. BlockFi had claimed ownership over the 55 million Robinhood shares that were pledged as collateral.
Amid FTX’s bankruptcy proceedings, legal battles over the ownership of the approximately $600 million in Robinhood shares were fought between SBF, BlockFi, and FTX creditor Yonathan Ben Shimon. Bankman-Fried’s legal team argued that the former FTX CEO had a claim to the assets in order to pay for his criminal defense. Currently remanded to jail following a judge revoking his bail on Aug. 11, Bankman-Fried is expected to appear in court for his first trial starting on Oct. 3.
Following the acquisition, the price of Robinhood shares on Nasdaq increased by approximately 4%, from $10.85 to $11.34 at the time of publication. It was recently discovered that the firm is the owner of the fifth-largest Ether (ETH) wallet, worth more than $2.5 billion.
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Robinhood Completes Purchase of Sam Bankman-Fried’s Stake
Robinhood, the popular cryptocurrency and stock trading platform, has successfully acquired over 55 million shares owned by former FTX CEO Sam Bankman-Fried, also known as SBF. The purchase, valued at $606 million, was completed after approval from Robinhood’s board of directors and the US District Court for the Southern District of New York.
The shares were originally held by Bankman-Fried and FTX co-founder Gary Wang through their company, Emergent Fidelity Technologies. However, these shares were seized by the US Department of Justice in January. The acquisition of the shares by Robinhood was made possible through a repurchase agreement with the US Marshals Service.
Emergent Fidelity Technologies, Bankman-Fried’s holding company, had filed for bankruptcy in February. The company was also targeted by BlockFi, a crypto lending firm, which filed for bankruptcy following FTX’s collapse. BlockFi claimed ownership of the 55 million Robinhood shares pledged as collateral.
The Legal Battle
During FTX’s bankruptcy proceedings, a legal battle ensued between Bankman-Fried, BlockFi, and FTX creditor Yonathan Ben Shimon over the ownership of the $600 million worth of Robinhood shares. Bankman-Fried’s legal team argued that he needed access to these assets to fund his criminal defense. Bankman-Fried is currently in jail after having his bail revoked on August 11. His trial is set to begin on October 3.
Impact on Robinhood
Following the acquisition, the price of Robinhood shares on Nasdaq experienced a 4% increase, going from $10.85 to $11.34. It was also recently revealed that Robinhood is the owner of the fifth-largest Ether (ETH) wallet, which holds more than $2.5 billion worth of ETH.
Robinhood’s purchase of Sam Bankman-Fried’s stake demonstrates the platform’s commitment to growth and its plans to further cater to its customers and shareholders. The acquisition not only solidifies Robinhood’s position in the market but also has a positive impact on the price of its shares. As Robinhood continues to expand its services, it will be interesting to see how this acquisition contributes to its success in the future.
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