Robinhood gets a green light to buy back the contested $575 million in stock seized from FTX's Sam Bankman-Fried

• Robinhood's board approved a plan to buyback over $575 million worth its shares owned by Sam Bankman-Fried.
• Bankman-Fried's shares in Robinhood have been at the heart of a four-way legal battle between the FTX founder and others.

Robinhood's board of directors authorized a plan to purchase FTX founder Sam Bankman-Fried's stake worth more than half a billion dollars in the company.

That will see the online stock brokerage buy back over $575 million worth of its own shares originally bought by Bankman-Fried in May last year through Emergent Fidelity Technologies – whose sole director and majority stakeholder is Bankman-Fried.

"On the capital management front, our Board authorized us to pursue purchasing most or all of our shares that Emergent Fidelity Technologies bought in May 2022," said Jason Warnick, chief financial officer of Robinhood Markets, in a Wednesday announcement.

"The proposed share purchase underscores the confidence the Board of Directors and management team have in our business," he added.

Emergent and Bankman-Fried disclosed a 7.6% stake in Robinhood in last year, when the then-billionaire paid $648 million for about 55 million shares. As of Wednesday's closing bell, Robinhood stock traded at $10.47, bringing the total amount of shares owned by the disgraced FTX founder to $575.8 million.

Bankman-Fried's stake in Robinhood has been at the heart of a four-way legal battle between himself, FTX's new bosses, cryptocurrency lending firm BlockFi and FTX creditor Yantan Ben Shimon. All parties have laid claim to Emergent's stake in Robinhood.

The dispute kicked off after FTX's stunning implosion last November that sent ripples through the entire crypto industry. In January, the US Department of Justice seized Bankman-Fried's shares, saying they "constitute property involved in violations."

Bankman-Fried has been charged with eight counts of fraud, including money laundering, and campaign finance violations – all of which carry a maximum sentence of 115 years in prison. He is currently under house arrest in his parents' home after pleading not guilty to the charges against him.