Crypto firm Robinhood aims to repurchase FTX founder Sam Bankman-Fried’s over 55 million shares in the company worth $578 Million.
According to Robinhood’s Q4 report, the company’s Board of Directors authorizes Robinhood to pursue purchasing most or all of the shares that Emergent Fidelity Technologies Ltd. bought in May 2022.
Robinhood CEO Vlad Tenev said “we think this repurchase will be accretive over time and remove a distraction for shareholders.” He said that the company’s balance sheet is strong with over $6 billion in cash.
“The proposed share purchase underscores the confidence the Board of Directors and management team have in our business,” Robinhood noted.
Robinhood Chief Financial Officer Jason Warnick stated “The board has authorized us to go and repurchase those and so we’re in discussions with the DOJ on that. Hard to tell exactly what the timeline is going to be.”
“Since there is limited precedent for this type of situation, we cannot predict when, or if, the share purchase will take place. We will provide updates as appropriate,” the earnings report added.
The US DoJ was looking to seize Robinhood shares linked to Sam Bankman-Fried aka SBF as they do not think the 56 million shares belonged to the bankrupt estate.
Last month, US federal authorities seized $700 million in assets that belonged to the FTX and Sam Bankman-Fried. The seized assets comprise Robinhood shares, $100 million at Silvergate Bank, $49.9 million at Farmington State Bank, and $20.7 million at ED&F Man Capital Markets.
SBF and FTX ex-CTO Gary Wang borrowed funds from Alameda Research through promissory notes to buy shares of Robinhood. Emergent Fidelity Technologies, the firm that manages the shares, filed for Chapter 11 bankruptcy a few days back.
In November 2022, BlockFi sued Emergent to obtain Robinhood shares that SBF allegedly pledged to the company as collateral. SBF then attempted to retain the Robinhood shares saying he won’t be able to access this property if it is alienated from Emergent as some of these funds are necessary to pay for his legal defense.
