Robinhood Agrees $600 Million Buyback of Seized Sam Bankman-Fried HOOD Stake From US Marshal Service
The US Marshal Service announced on Monday that Robinhood has agreed to buy back the seized equity stake in the company from Sam Bankman-Fried (SFB). The deal is reportedly worth around $600 million. SFB and Robinhood have been in talks since December to settle a civil suit brought by the US government.
The US government had accused SFB of not properly disclosing his “significant financial interests in the company”, even though he had been a shareholder since November 2018. The government sought to hold the investor responsible for “willfully evading $37 million in taxes, primarily by filing false or misleading documents with the IRS and taking other steps to conceal his true economic interests”.
The $600 million buyback resolves the government’s civil suit and comes with a $100 million in penalties that SFB has agreed to pay.
The US Marshal Service plans to use the proceeds of the sale for restitution to victims of crimes. According to Andrew Murray, the US attorney for the Western District of North Carolina, the agency has already “recovered more than $3 billion in taxable assets” since October 2021.
Despite the civil suit being resolved, SFB still faces criminal charges. He faces up to five years in prison for wire fraud, tax evasion, and money laundering.
This is not the first time Robinhood has been caught up in controversy. Last month, the company was criticized after restricting access to popular stocks, such as GameStop. In response, it had to pause buying and selling of certain cryptos and released an updated customer agreement saying users had to agree to arbitration instead of filing a class action lawsuit. Although the buyback of SFB’s equity stake has now been resolved, it’s evident that Robinhood still has a long way to go to restore its reputation.