Robinhood has announced a share repurchase agreement worth $605.7 million with the US Marshal Service (USMS) to regain control of shares previously held by Sam Bankman-Fried's (SBF) firm, Emergent Fidelity Technologies. This move comes after a series of legal events that began when SBF disclosed a 7.6% stake in Robinhood, just six months before his empire collapsed.
The shares in question had been seized and subsequently transferred into the US government's custody after Bankman-Fried's cryptocurrency exchange, FTX and Emergent filed for bankruptcy protection in 2022. Reacting to the latest development, Robinhood's shares have surged by more than 3% in pre-market trading as news of the buyback was released.
Robinhood Announces Completion of the Share Buyback
Jason Warnick, the Chief Financial Officer of Robinhood Markets, remarked: "We are happy to have completed the purchase of these shares and look forward to executing our growth plans on behalf of our customers and shareholders."
The shares, totaling 55.3 million and priced at USD $10.96 a piece, received approval for buyback from the US District Court for the Southern District of New York, paving the way for Robinhood to repurchase the stake from SBF.
SBF's journey in the cryptocurrency landscape saw him amass an estimated net worth of USD $26 billion, largely due to the surging value of digital assets like Bitcoin. Additionally, he became a prominent political donor in the United States. However, the collapse of his cryptocurrency exchange, FTX wiped away his fortune.
Currently, SBF is facing legal challenges in the form of fraud and conspiracy charges stemming from the collapse of his now-bankrupt cryptocurrency exchange in November 2022. In a recent development, a US judge in Manhattan ordered his incarceration pending his trial in November, citing concerns that he may have tampered with witnesses while under house arrest at his parent's residence in Palo Alto, California on a USD $250 million bail.
Bankman-Fried's Legal Battles Continue
According to a report by Finance Magnates, SBF's legal team has contended that his imprisonment is impeding his ability to prepare for trial. This week, they filed a challenge to his detention at the 2nd US Circuit Court of Appeals, seeking his temporary release. Meanwhile, SBF recently pleaded not guilty to a revised indictment that includes seven counts of charges, including fraud and money laundering, relating to the collapse of FTX.
In a recent development, Robinhood Markets terminated its partnership with Jump Trading, a Chicago-based player in the traditional finance industry, which had been facilitating crypto transactions for the commission-free broker. While on-chain data suggests that the partnership ended in July, neither of the companies had officially confirmed the termination, Finance Magnates reported.
This article was written by Jared Kirui at www.financemagnates.com.
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