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Robinhood Board of Directors approves repurchase of $578 million of shares held by FTX founder

2025-01-28 Update From: SLTechnology News&Howtos shulou NAV: SLTechnology News&Howtos > IT Information >

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Shulou(Shulou.com)11/24 Report--

According to news in the morning of February 9, Beijing time, with the sudden bankruptcy of the US cryptocurrency exchange FTX, its founder Sam Bankman-Fried (hereinafter referred to as Bankman) has become a controversial figure accused of "financial fraud" by US prosecutors. The board of directors of Robinhood, a US Internet brokerage, has approved a plan to buy back 5500 million shares held by Bankman.

Bankerman, the former chief executive of FTX, bought a large stake in Robinhood through an entity called Emergent Fidelity Technologies in May last year.

In January, the Justice Department took control of Bankman's stake in Robinhood. It is reported that Robinhood is working with the Ministry of Justice to promote the repurchase of his shares.

On Wednesday, local time, Robinhood released its latest quarterly results, showing that total sales rose 5% from the previous quarter to $380 million. The good news sent the company's shares up 3 per cent in after-hours trading.

Jason Warnick, chief financial officer of Robinhood, told a US financial television channel that the company's board of directors had authorized management to buy back shares held by the subsidiary of the FTX exchange.

Warnick said that for Robinhood shareholders, Bankman's stake has always been a big unresolved issue, a "boot" that did not fall off, and they are concerned about what to do with the shares in the future.

Warnick said the board has authorized management to conduct share buybacks and the company is in discussions with the U.S. Department of Justice, but it is not yet possible to disclose the exact timetable of the buyback transactions.

In releasing its quarterly results, Robinhood management also said that there are few precedents for such stock operations in the history of US capital markets, so management cannot predict when the repo transaction will be completed, and the company will release the latest information when it matures.

According to a judicial filing filed by the U.S. Department of Justice on January 20, Bankman owns a total of 55273469 shares in Robinhood, equivalent to 7% of all the company's outstanding shares. According to Wednesday's closing price, the market value of the shares is equivalent to $578 million.

According to reports, the actual controller of the Emergent Fidelity subsidiary is Bankerman and Gary Wang, another co-founder of the FTX exchange. Both founders borrowed money from Alameda Research, a company linked to FTX, to buy a large number of shares in Robinhood, according to court documents.

The Robinhood shares are also reported to be in the spotlight in another court battle involving FTX Exchange, Bankerman, BlockFi, a cryptocurrency loan service, and a number of international entities.

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