Robinhood to buy back Bankman-Fried's stake from US govt for $605.7 million

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The logo of Robinhood Markets, Inc. is seen at a pop-up event on Wall Street after the company's IPO in New York City

The logo of Robinhood Markets, Inc. is seen at a pop-up event on Wall Street after the company's IPO in New York City, U.S., July 29, 2021. REUTERS/Andrew Kelly/File Photo Acquire Licensing Rights

Sept 1 (Reuters) - Robinhood (HOOD.O) said on Friday it had entered into a share repurchase agreement with the United States Marshal Service (USMS) for $605.7 million to buy back stock from Sam Bankman-Fried's Emergent Fidelity Technologies.

The shares of Robinhood were seized and subsequently transferred to the custody of the U.S. government after Bankman-Fried's FTX and Emergent filed for bankruptcy protection last year.

Robinhood shares climbed more than 3% in premarket trading on the news.

The online brokerage said the sale of the 55.3 million shares at $10.96 apiece had been approved by the U.S. District Court for the Southern District of New York.

Robinhood first disclosed its intention to buy back the stake in February and said the company's board had authorized it to pursue purchasing most or all of the stock.

Just six months before his company filed for bankruptcy last November, Bankman-Fried revealed a 7.6% stake in Robinhood but said he did not have any intention of taking control of the retail trading platform. He told Reuters at the time that FTX was "excited about Robinhood's business prospects and potential ways we could partner with them."

Bankman-Fried rode a boom in the value of bitcoin and other digital assets to build a net worth of an estimated $26 billion and become an influential political donor in the United States, but FTX's collapse wiped out his fortune.

He has pleaded not guilty to fraud and conspiracy charges stemming from the November 2022 collapse of his now-bankrupt cryptocurrency exchange.

A U.S. judge in Manhattan earlier this month ordered Bankman-Fried be jailed ahead of his October trial, finding that the former billionaire likely tampered with witnesses while confined to his parents' Palo Alto, California, home on $250 million bail.

Reporting by Manya Saini in Bengaluru and Hannah Lang in Washington; Editing by Devika Syamnath and Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

Manya Saini reports on prominent publicly listed U.S. financial firms including Wall Street’s biggest banks, card companies, asset managers and fintechs. Also covers late-stage venture capital funding, initial public offerings on U.S. exchanges alongside news and regulatory developments in the cryptocurrency industry. Her work usually appears in the finance, markets, business and future of money sections of the website. Contact: 9958867986

Hannah Lang covers financial technology and cryptocurrency, including the businesses that drive the industry and policy developments that govern the sector. Hannah previously worked at American Banker where she covered bank regulation and the Federal Reserve. She graduated from the University of Maryland, College Park and lives in Washington, DC.

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