But there might be hope on the horizon.
Bankman-Fried, who runs startup FTX, a Bahamas-based cryptocurrency exchange, said in the filing that he bought shares of Robinhood because he thought they “represented an attractive investment.” He added that his stake is meant to be a passive investment and that he “currently has no intention of taking any action to change or influence control of” Robinhood.
FTX has taken the crypto world by storm, attracting over a million users since its launch in 2019, so having its founder as a strategic investor in Robinhood could help lend more credibility to the brokerage, not to mention a backer with plenty of money at its disposal. .
Privately held FTX recently raised new funds that value the company at $32 billion. According to data tracked by Forbes, Bankman-Fried, who is also the founder of crypto trading firm Alameda Research, is worth $21.2 billion.
FTX had no further comment on Bankman-Fried’s participation in Robinhood. Robinhood released a statement on its verification on Thursday. Robinhood Communications Team Twitter Feed
stating that “we are redoubling our efforts to create a multi-generational business where customers can create wealth for their generations.”
“Of course, we think it’s also an attractive investment. We have the best customer base, we’re introducing great new products and we have the team to deliver. Our journey has only just begun,” Robinhood added.
Bankman-Fried’s investment could help Robinhood get back on track. Robinhood, as well as its rival Coinbase, have struggled this year due to financial market volatility.
Shares of Coinbase, which plunged earlier this week on the back of a poor earnings report and weak outlook, rallied in tandem with Robinhood on Friday. Coinbase stock is up around 25%. But its shares are still down 30% this week and more than 70% this year.