Former FTX CEO Sam Bankman-Fried and FTX co-founder Gary Wang purchased a $578 million stake in Robinhood last year. Robinhood's board of directors has approved a plan to repurchase this share.
The co-founders of FTX purchased 55 million shares of Robinhood stock in May through Emergent Fidelity Technologies by obtaining loans directly from FTX's sister company, Alameda Research.
In its fourth-quarter report, Robinhood confirmed it had gotten board approval to repurchase the stock.
"Our Board authorized us to pursue purchasing most or all of our shares that Emergent Fidelity Technologies bought in May 2022," Robinhood's chief financial officer Jason Warnick said. "The proposed share purchase underscores the confidence the Board of Directors and management team have in our business."
Robinhood has been working with the DOJ on a plan to accomplish the buyback, but nothing has been finalized as of yet, according to Warnick's previous statement to CNBC.
In January, the Department of Justice (DOJ) of the United States seized 55 million shares, representing approximately 7% of the corporation.
Following a court lawsuit by cryptocurrency lending platform BlockFi to retrieve the shares, the assets were seized because Bankman-Fried and Wang used the shares as collateral to get a loan from BlockFi.
The contested shares have been the subject of multiple disputes.
FTX petitioned the court last year to prevent BlockFi from claiming the Robinhood shares, following the collapse of the exchange in November.
Emergent Fidelity, however, did apply for bankruptcy protection on February 3, unlike FTX and other FTX-affiliated firms, which did so in November.
Comparing the third and fourth quarters, the trading platform based in the United States witnessed cryptocurrency-based transaction revenues from its "Robinhood Web3 Wallet" decrease by 24% to $39 million. Comparing the third quarter to the second quarter, revenue decreased by 13%.
In the fourth quarter of 2022, sales revenue climbed by 5% to $380 million. In 2022, however, the company reported a net loss of almost $1 billion.
Despite rolling out the Robinhood Web3 Wallet to more than one million people on the waitlist during the quarter, the company's crypto-related revenue decreased.
Google Finance reports that Robinhood's HOOD stock has surged 4.78% in just a few hours since the release of the earnings announcement.
