Robinhood Reclaims $605.7 Million Stock Seized From SBF Amid Legal Drama

Key Points:

• Robinhood agrees to buy back $605.7 million in stock from FTX founder Sam Bankman-Fried, previously seized by the U.S. government.
• Bankman-Fried, once worth an estimated $26 billion, faces legal troubles.
• The stock repurchase, approved by a U.S. court, resolves ownership disputes and signals Robinhood’s commitment to managing its ownership structure.

According to Reuters, popular trading platform Robinhood has reached an agreement with the United States Marshal Service to repurchase $605.7 million worth of stock previously owned by Sam Bankman-Fried, the founder of the now-bankrupt crypto exchange FTX.

This development comes after Robinhood disclosed its intention to buy back the stake in February and received approval from the U.S. District Court for the Southern District of New York.

Last year, the U.S. government seized 55 million HOOD shares owned by Bankman-Fried and fellow FTX co-founder Gary Wang through their holding company, Emergent Fidelity Technologies, as a result of FTX and Emergent’s bankruptcy filings.

Bankman-Fried, who at one point held a 7.6% stake in Robinhood, had no plans to take control of the retail trading platform. He expressed optimism about Robinhood’s business prospects and potential partnerships with FTX.

However, FTX’s collapse erased Bankman-Fried’s estimated $26 billion net worth. He now faces legal troubles, having pleaded not guilty to fraud and conspiracy charges related to the November 2022 collapse of his cryptocurrency exchange.

Recently, a U.S. judge in Manhattan ordered Bankman-Fried’s detention ahead of his October trial, citing concerns of potential witness tampering.

The stock repurchase marks a significant step in resolving the ownership dispute surrounding the seized Robinhood shares, benefiting both the trading platform and the U.S. government.

Robinhood’s move to regain control of these shares demonstrates its commitment to managing its ownership structure and moving forward amid legal and financial challenges.

Coincu will continue to update the situation related to Sam Bankman-Fried, you can find out more information through this article.

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