Robinhood Markets said Wednesday that it would try to buy back shares purchased by former FTX CEO Sam Bankman-Fried, as his 7.6% stake in the company remains a contested factor in both Bankman-Fried’s criminal case and the defunct exchange’s bankruptcy.
The purchase would remove a distraction for shareholders, company CEO Vlad Tenev said on an earnings call with investors and analysts. He added that the purchase of roughly 55 million shares had already been approved by the company’s board of directors.
Shares of Robinhood popped following the announcement, up over 5% to around $11 in after-hours trading. While the company is working with the Department of Justice, Robinhood did not put forth a timeline for when the purchase may be complete,
“Since there isn’t much precedent for situations like these, I can’t predict how long this will take,” Tenev said.
Bankman-Fried and FTX cofounder Gary Wang purchased the shares in Robinhood last May through a holding company called Emergent Fidelity Technologies. A court document filed last December revealed that Wang and Bankman-Fried had taken loans totaling $546 million from Alameda Research—Bankman-Fried’s trading firm—to purchase the shares.
The U.S. Justice Department disclosed last month it had taken custody of those shares, which were worth around $450 million at the time they were secured. However, defunct crypto lender BlockFi is also trying to get its hands on the Robinhood shares, claiming that they were pledged to it under the terms of an agreement made last November.
Recently, Sam Bankman-Fried’s lawyers have filed a motion to keep possession of the equities, arguing that he needs them to pay for his criminal defense. They argued that requests by debtors of FTX to secure the funds should be denied because they
