Robinhood Acquires Over 55 Million Shares Owned by Former FTX CEO - COINTURK NEWS
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Robinhood Acquires Over 55 Million Shares Owned by Former FTX CEO

8:15 pm (20 days ago)
September 1, 2023

Cryptocurrency and stock trading platform Robinhood has announced that it has acquired over 55 million shares owned by former FTX CEO Sam Bankman-Fried. Following the announcement, the price of Robinhood shares increased by approximately 4% from $10.85 to $11.34, and it was revealed that the company owns a significant Ethereum wallet.

$606 Million Deal

According to a blog post published on August 31, Robinhood completed the purchase of 55,273,469 shares for approximately $606 million after applying to the U.S. Securities and Exchange Commission. The shares, owned by Bankman-Fried and FTX co-founder Gary Wang through Emergent Fidelity Technologies, were seized by the U.S. Department of Justice in January.

Robinhood’s board of directors announced the approval of the deal in the company’s Q4 2022 report and stated in an SEC filing dated August 30 that the U.S. Southern District Court of New York approved the acquisition as exempt from “any claim, interest, lien, or encumbrance.” Robinhood entered into the repurchase agreement with the U.S. Marshal Service. Jason Warnick, CFO of Robinhood, stated:

“We are pleased to have completed the purchase of these shares and look forward to implementing our growth plans on behalf of our customers and shareholders.”

Increase in Stock Prices Due to the News

Emergent Fidelity Technologies, owned by Bankman-Fried, filed for bankruptcy in February. The company was already targeted due to the 55 million Robinhood shares pledged as collateral by BlockFi, a crypto lending firm that filed for bankruptcy after the collapse of FTX.

In the midst of FTX’s own bankruptcy proceedings, SBF, BlockFi, and FTX creditor Yonathan Ben Shimon were engaged in a legal battle over the ownership of approximately $600 million worth of Robinhood shares. Bankman-Fried’s legal team argued that he claimed rights over the assets to pay for his criminal defense as the former FTX CEO. Bankman-Fried, who is still in custody following the revocation of his bail on August 11, is expected to appear in court for his first hearing on October 3.

The price of Robinhood shares on Nasdaq increased by approximately 4% to $11.34 after the acquisition. Cryptocurrency analysis platforms recently revealed that the company owns the fifth-largest Ethereum wallet with a value of over $2.5 billion.

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