Robinhood says its board has given the green light to a plan to buy FTX founder Sam Bankman-Fried's seven per cent stake in the stock trading app.
Last May it emerged that Emergent Fidelity Technologies, of which Bankman-Fried is the sole director, took a 7.6% stake - currently worth about $580 million - in Robinhood.
As the firm reported fourth quarter results, Jason Warnick, CFO, Robinhood, told CNBC: “The board has authorised us to go and repurchase those and so we’re in discussions with the DOJ on that. Hard to tell exactly what the timeline is going to be."
Bankman-Fried is currently facing eight criminal charges related to the collapse of FTX, the cryptocurrency exchange he founded. He has pleaded not guilty.
The news sent share in Robinhood up more than five per cent in after-hours trading on Wednesday.
However, the firm missed fourth quarter expectations, posting a net loss of $166 million on revenues of $380 million. The loss was partly down to a "processing error" that cost several million dollars and resulted in executives losing cash bonuses.