FinTech: Sam Bankman-Fried Of FTX Rejects Rumors He Is Acquiring Robinhood

June 30, 2022 | Digital Assets, FinTech, News
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A Reuters report said FTX is not pursuing an acquisition of Robinhood.

FTX, the crypto platform owned by billionaire Sam Bankman-Fried, has scotched media reports that it was pursuing a deal to acquire commission-free trading app Robinhood (NASDAQ: HOOD). Bloomberg said Monday that FTX was exploring whether it might be able to acquire Robinhood, quoting people with knowledge of the matter. (Reuters)

However, Reuters said it received an email from Bankman-Fried that said: “There are no active M&A conversations with Robinhood. We are excited about Robinhood’s business prospects and potential ways we could partner with them.”

Crypto winter

It is plausible Bankman-Fried iced his plans for Robinhood in the face of the massive and unrelenting downturn in the crypto assets market.

On Wednesday, crypto hedge fund Three Arrows Capital, known for its outsized and leveraged bullish bets on cryptos, was put into liquidation by a court in the British Virgin Islands the same day the fund received a notice of default from crypto broker Voyager Digital (TSE: VOYG).

As at the time of writing, bitcoin has violated (again) the critical support level of $20,000 and is trading at $19210.50, and is down nearly 4% over 24 hours.

Bankman-Fried of FTX: More insolvencies likely

In an interview with Forbes published Tuesday, Bankman-Fried warned that more crypto insolvencies were on the cards.

“There are some third-tier exchanges that are already secretly insolvent,” he said.

In the recent crisis, Bankman-Fried helped out Voyager Digital and another firm, BlockFi, with credit lines totalling $750 million. According to Forbes, which described him as a “smart vulture capitalist,” these actions are not entirely altruistic, given that his own vast fortune depends upon a recovery in crypto assets.

But he may not continue his actions to support the digital market.

“There are companies that are basically too far gone and it’s not practical to backstop them for reasons like a substantial hole in the balance sheet, regulatory issues, or that there is not much of a business left to be saved,” Bankman-Fried said.

FTX still has stock trading in its crosshairs

Though by all appearances the Robinhood deal is on the backburner, FTX has not hesitated to make strategic acquisitions that would advance its ambitions in stock trading.

Last week, FTX US acquired Embed Financial Technologies Inc, a new FINRA, DTC, NSCC, Nasdaq, and IEX member clearing firm for an undisclosed sum.

The acquisition will enable FTX to route, execute, clear, and custody all customer equities and options accounts and trades through the use of Embed’s infrastructure and licensure.

Related Story: Sam Bankman-Fried Led FTX.US Makes Inroads Into Stock Trading

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