“The proposed share purchase underscores the confidence the Board of Directors and management team have in our business,” Robinhood said
Now that Robinhood has the board's approval, it would try its best to regain the equity from the fallen crypto giant
Its shares that were bought by a company of Sam Bankman Fried and his co-founder, Gary Wang.
According to an affidavit filed by Sam Bankman Fried in the court during FTX’s insolvency proceedings, he along with Gary registered a new company to acquire the Robinhood shares. The company was named Emergent Fidelity Technologies and it bought 55 million shares or roughly 7 percent of the company for $578 million dollars.
However, while releasing the fourth quarter report, Robinhood Market Inc. confirmed that they have finally received the board's approval to buy back the entire equity from Emergent Fidelity.
“The proposed share purchase underscores the confidence the Board of Directors and management team have in our business”
However, the three parties claiming the shares include FTX creditor Yonathan Ben Shimon, BlockFi, and SBF.
BlockFi, a digital asset lending platform, has also claimed the Robinhood shares as SBF had used them as collateral for a loan. Right now, this claim is being contested in the court as SBF had asked the court to not release them for BlockFi. According to SBF, Emergent Fidelity had not filed for bankruptcy with the other sister firms of FTX, it could not be liquidated for FTX’s liabilities. However, Emergent Fidelity filed for Bankruptcy Protection last week.
SBF and Wang had also taken a loan from Alameda Research for buying seven percent of Robinhood. SBF told the court,
"I borrowed the sum of $491,743,563.39, and Gary borrowed the sum of $54,638,173.71 from Alameda [Research]," Bankman-Fried said in the filing. "All of the sums evidenced by the promissory notes were capitalized into Emergent as working capital so that it could purchase the shares in Robinhood.”
Robinhood on the other hand had also stated that they would be working with the Department of Justice to buy back the share from SBF’s company. The fourth quarter reports had been terrible for Robinhood’s Web3 wallet which recorded a fall of 24%. However, the overall net revenue of the organization increased by 5% in this quarter.
Now that Robinhood has the board's approval, it would try its best to regain the equity from the fallen crypto giant. But the disputed ownership of the shares could become a legal battle for the trading platform to do so.
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