FTX founder Sam Bankman-Fried after his arraignment in New York City in December. Ed Jones/AFP/Getty Images
Robinhood bought 55 million of its shares, worth $605 million, once owned by Sam Bankman-Fried.
The stake was seized by the Justice Department in January as part of an indictment against the FTX founder.
Robinhood, SBF, FTX and a bankrupt crypto lender had all laid claim to the seized shares.
Robinhood has bought back more than $600 million worth of its own shares that were owned by Sam Bankman-Fried before his arrest.
In a regulatory filing with the Securities and Exchange Commission (SEC) on Friday, the trading platform said it acquired 55 million shares from the United States Marshal Service (USMS).
The deal is worth more than $605 million. The same number of Robinhood shares were worth about $450 million when they were seized by the Justice Department following the FTX founder’s arrest in January, but the stock has since risen by more than a third this year.
Emergent Fidelity Technologies bought Bankman-Fried’s Robinhood shares, but went bankrupt shortly after FTX collapsed, bringing down related companies.
The Robinhood shares represented the bulk of a $700 million pool of Bankman-Fried’s assets that were seized after his arrest. He would be forced to give up the assets if found guilty of charges including fraud, money laundering and violating campaign finance laws.
The sale resolves a long-standing four-party dispute. Bankrupt crypto lender BlockFi first sued Emergent Fidelity in November over the shares, saying they were promised as security for a loan.
FTX disputed this claim in December, saying the assets should be seized until they could be fairly divided among creditors. Then in January, Bankman-Fried argued that he needed the shares to fund his legal defense.
Robinhood shares closed up 2% on Friday after the filing, valuing the company at about $10 billion. Stock buybacks can increase a company’s stock price by reducing the supply of shares outstanding.
It’s unclear what will happen to the funds now held by the Marshal Service.
Bankman-Fried was sent to prison last month after a federal judge revoked his bail because he was convinced he had repeatedly tried to influence witnesses against him before his trial in October.
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