Following the fall of FTX, Robinhood’s board of directors has given the nod to buy back a $578 million stake which Sam Bankman invested in the company.
The company stated in its fourth-quarter report published on Feb, 8 2023.
Former FTX CEO Sam Bankman-Fried and FTX co-founder Gary Wang bought the Robinhood shares in 2022. The 55 million share were bought in May 2023 through Emergent Fidelity Technologies by taking out loans directly from FTX’s sister firm, Alameda Research.
“Our Board authorised us to pursue purchasing most or all of our shares that Emergent Fidelity Technologies bought”. Robinhood’s Chief Financial Officer, Jason Warnick said.
The shares however generate some controversy when a lending platform BlockFi claims ownership of it. The assets were seized following a court filing stating that Bankman-Fried and Wang used the shares as collateral to take out a loan from BlockFi.
However, on Dec. 23, FTX asked the court to stop BlockFi from claiming the Robinhood shares.
Meanwhile, during the early stage of the collapse, world’s largest cryptocurrency exchange by trade volume, Binance also offered to acquire FTX but walk away after due diligence was done.
Binance also sold all its positions in FTX token, FTT, roughly 23 million FTT tokens valued at about $529 million.
Investors King could recall a major cryptocurrency exchange, FTX, went bankrupt in early November 2022 following a report by CoinDesk highlighting potential leverage and solvency concerns involving FTX-affiliated trading firm Alameda Research.
The FTX’s collapse shook the volatile crypto market, which lost billions at the time, falling below a $1 trillion valuation after FTX faced a liquidity crisis and searched for bailout funds.
Subsequently, the cryptocurrency exchange FTX was hacked in which hundreds of millions worth of tokens were stolen.
In January 2, 2023, FTX founder and ex-CEO Sam Bankman-Fried pleaded not guilty to all charges after he was arrested in the Bahamas and extradited to the United States.
