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Robinhood’s board of directors has approved a plan to buy back the $578 million stake in their company which was bought by former FTX CEO Sam Bankman-Fried and FTX co-founder Gary Wang last year.

Robinhood confirmed it got board approval to buy back the stake in its fourth quarter report, which was published on Feb. 8.

“Our Board authorized us to pursue purchasing most or all of our shares that Emergent Fidelity Technologies bought in May 2022,” said Robinhood’s chief financial officer Jason Warnick, adding

“The proposed share purchase underscores the confidence the Board of Directors and management team have in our business.”

The FTX co-founders bought 55 million shares of Robinhood stock — worth $578 million at current prices — in May through Emergent Fidelity Technologies by taking out loans directly from FTX’s sister firm Alameda Research.

On Jan. 9, the United States Department of Justice (DOJ) seized the 55 million shares — equating to around 7% of the company.

The assets were seized following a court filing from cryptocurrency lending platform BlockFi to reclaim the shares, as Bankman-Fried and Wang used the shares as collateral to take out a loan from BlockFi.

Warnick told CNBC on Feb. 8 that Robinhood has been working with the DOJ on a plan to facilitate the buyback but nothing has been finalized yet.

The shares in question have been the subject of more than one dispute.

On Dec. 23, FTX asked the court to stop BlockFi from claiming the Robinhood shares, following the exchange’s collapse in November. 

Meanwhile, although Emergent Fidelity didn’t file for Chapter 11 bankruptcy like FTX and other FTX-affiliated entities, the firm did file for bankruptcy protection on Feb. 3.

Q4 crypto revenue falls

The United States-based trading platform saw cryptocurrency-based transaction revenues from its “Robinhood Web3 Wallet” fall 24% quarter-on-quarter to $39 million in the fourth quarter. These figures also fell 12% in Q3.

Overall net revenues increased by 5% to $380 million in Q4 2022. However, the firm reported an overall net loss of over $1 billion in 2022.

Related: Robinhood Web3 wallet enters beta, taps Polygon as first blockchain

The fall in crypto-related revenue comes despite the firm managing to roll out the Robinhood Web3 Wallet to more than 1 million waitlisted users over the quarter.

In just a few hours since the earnings report was released, Robinhood’s stock, tickered HOOD, is up 4.78%, according to Google Finance.

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