The US Marshals Service has agreed to an approximately $600 million buyback of an index of stock and options owned by Robinhood-founder Sam Bankman-Fried in the now-defunct Market Making Crypto ETFs (MMCF).
The MMCF was the first crypto-focused index to be traded on the stock exchange. Bankman-Fried and the MMCF had come under scrutiny by regulators in late 2020, leading to a seizure of the index and Bankman-Fried’s assets by the US Marshals.
The buyback was negotiated by Bankman-Fried’s legal team and marks the end of the dispute. Bankman-Fried is reportedly receiving all of the proceeds of the buyback, which will be used to pay off the US Marshals Service for its seizure of his assets.
The buyback also helps to clarify the regulatory environment surrounding crypto trading. It is expected that banks and other financial institutions may begin offering index-based crypto investments, which would be subject to the same regulation and oversight that applies to other investments traded on the stock exchanges.
The settlement and buyback are also being seen as a sign that the US government is willing to use asset seizure as an enforcement tool for crypto-related offenses. This could help to reduce the potential for fraud and other illicit activities that could occur within the industry.