FTX CEO Sam Bankman-Fried has reportedly taken a big position in brokerage app Robinhood, Coindesk wrote Thursday (May 12), citing a Securities and Exchange Commission (SEC) filing.
The position was executed through Emergent Fidelity Technologies, an Antiguan firm.
It represents a 7.6% stake in Robinhood, over 56 million shares worth nearly $482 million.
PYMNTS wrote that Robinhood had recently rolled out a stock lending feature, letting users lend out fully paid stocks to borrowers that the company had recruited.
The company announced that users will be paid once their stocks had been lent successfully.
Chief Brokerage Officer Steve Quirk said in a press release that Robinhood was doing the work “of finding borrowers and managing transactions while customers can add a potential source of passive recurring income to their portfolio.”
Robinhood has said stock lending could be the wrong choice for some customers, saying that Robinhood Securities might default obligations and not be able to return the securities it borrowed.
The company said it would be offering cash collateral for securities loans. The report notes that after the shares are loaned, customers can track their earnings, see positions and enable or disable stock lending with the company app.
Robinhood CEO and co-founder Vlad Tenev said smaller investors have been pulling back from trading, due to a difficult economy.
Speaking during the company’s quarterly earnings call, Tenev said things had been tenuous, with declining trading volumes and monthly active users.
“For most of our history, Robinhood has operated in a period of low interest rates, low inflation and rising markets,” Tenev said. “Our customers are now experiencing all three of these trends going in the opposite direction, perhaps for the first time in their lives. As a result, some are engaging with us less regularly and reducing their trading activities.”