Buried in the 29th paragraph of a truly nauseating story about fallen crypto guru Sam Bankman Fried’s pay-for-play connections to celebrities and influencers, the New York Times drops a heretofore unreported political name into the mix.
According to the Times, the investor Bryan Baum “helped Mr. Bankman-Fried and his younger brother, Gabe, schedule a meeting in Miami with Ron DeSantis, Florida’s governor, according to three people familiar with the matter and messages viewed by The Times.”
The Times offered no further details about the meeting with Gov. DeSantis — when it occurred or its purpose. Modern Consensus will continue to report on this development and will update this story as more details emerge.
The article details how SBF invested a staggering $700 million in the venture-capital firm started by Baum and his partner Michael Kives, a former Hollywood agent. According to the Times, the fund, K5 Global, in turn paid $125 million each to Baum and Kives personally, a founders’ fee of more than 35%.
That gluttonous payout has led to a lawsuit filed late last week in Wilmington, DE’s bankruptcy court by the FTX trustees charged with clawing back money misspent by the company during SBF’s reign atop the crypto exchange. The suit seeks the return of the entire $700 million investment.
The suit claims that Kives and Baum were specifically tasked with introducing SBF to celebrities. According to Reuters, “Bankman-Fried described Kives, who served as an aide to [Hillary] Clinton when she was a Democratic U.S. senator from New York, and who worked as a Hollywood agent for clients including actor and former Republican California governor Arnold Schwarzenegger and singer Katy Perry, as ‘probably, the most connected person I’ve ever met,’ and ‘a one-stop shop’ for political relationships and celebrity partnerships.”
One particularly enraging example listed in the complaint alleges that a shell company controlled by SBF “used $214 million in funds from FTX to buy a minority stake in Kendall Jenner’s 818 Tequila brand, at a time when the tequila company’s assets were valued at just $2.94 million in its filings with the U.S. Securities and Exchange Commission.”
K5 Global has thus far resisted the clawback. The firm told Bloomberg that “K5 was under the impression — like many others — that SBF was completely legitimate, and that they were entering into a fair, long-term, and mutually beneficial business relationship.”
Other firms, however, have faced pressure to return money received from SBF or FTX. Embed Financial has been sued by FTX trustees who alleged in a court filing that “Bankman-Fried and members of his inner circle used misappropriated funds to pay Embed, a broker-dealer acquired by Bankman-Fried and that Embed was worth just a fraction of what the group paid for it.”
The Brazilian hedge fund Modulo Capital was said to be “negotiating the return of $400 million invested by Bankman-Fried” while the Metropolitan Museum of Art agreed to return $550,000 it received from FTX in 2022.