Shalini Nagarajan

Global media company Semafor is reportedly set to surrender Sam Bankman-Fried’s pool of investment after being criticized for keeping dirty money.&nbsp;



<a href="https://www.thewrap.com/semafor-sam-bankman-fried-investment-redeem-return/" target="_blank" rel="noreferrer noopener">The Wrap</a> reported on Monday that the New York-based media firm “intends to redeem” the investment, of which the size is unknown as yet. 



Sam Bankman-Fried, and his brother Gabriel, made undisclosed investments in Semafor as part of a $25 million funding round, according to <a href="https://www.crunchbase.com/organization/semafor/company_financials" target="_blank" rel="noreferrer noopener">Crunchbase</a> data. He is said to have funneled millions to other media outlets including ProPublica, the Intercept, Vox, the Law and Justice Project and Fox Media. 



“They all took it, and none of them broke the story,” podcaster Jack Posobiec <a href="https://twitter.com/jackposobiec/status/1593975446261338115" target="_blank" rel="noreferrer noopener">tweeted</a>.



However, ProPublica said last month that it would <a href="https://www.propublica.org/atpropublica/bankman-fried-family-donates-5-million-to-propublica" target="_blank" rel="noreferrer noopener">return the $1.6 million</a> it had received so far from Bankman-Fried’s family foundation.



<a href="https://www.reuters.com/business/media-telecom/semafor-news-platform-launches-2022-10-18/" target="_blank" rel="noreferrer noopener">Launched</a> less than three months ago by former Bloomberg CEO Justin Smith and former New York Times columnist Ben Smith (who are not related), Semafor calls itself a global news-focused digital media firm for “college-educated readers.”  



Bankman-Fried’s exact stake in Semafor isn’t clear, but Justin Smith told employees in a <a href="https://twitter.com/Justin_B_Smith/status/1598712692025528323" target="_blank" rel="noreferrer noopener">Dec. 2 memo</a> that the crypto boss’ investment hadn’t yet been converted to equity. He also had no influence over editorial coverage, Smith added.



The former FTX CEO’s investment in Semafor first drew attention when the outlet reported <a href="https://www.semafor.com/article/11/22/2022/sam-bankman-fried-elon-and-a-secret-text" target="_blank" rel="noreferrer noopener">Elon Musk had asked Bankman-Fried</a> to “roll the $100 million stake he had owned for a few months into a privately held Twitter.” Musk debunked the claim, and called out the outlet for a conflict of interest due to its ties to Bankman-Fried.



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<blockquote class="twitter-tweet" data-width="550" data-dnt="true">As I said, neither I nor Twitter have taken any investment from SBF/FTX. Your article is a lie. Now, I’m asking again, how much of you does SBF own?&mdash; Elon Musk (@elonmusk) <a href="https://twitter.com/elonmusk/status/1595494411579711490?ref_src=twsrc%5Etfw">November 23, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Meanwhile, Semafor’s editor-in-chief Ben Smith told Musk: “Like you and many others, we took an investment from him. We have covered him aggressively, and disclose it every time we write about him.”



Semafor and a spokesperson for Bankman-Fried didn’t return Blockworks’ request for comment by press time.



After FTX’s implosion, Semafor came under attack for not returning the disgraced crypto boss’ investment. The outlet provided a statement to blogger Mickey Klaus that it had received all investments “in full in USD,” and that it wasn’t expecting its business to be financially impacted.&nbsp;



But Klaus hit back, saying <a href="https://kaus.substack.com/p/send-it-back-ben" target="_blank" rel="noreferrer noopener">in a blog</a>: “That&#8217;s nice, but actually I wasn’t worried that Semafor wouldn’t be able to hold on to its Bankman bucks. The question is more: Will Semafor give the money back?”



“If only to be able to hold their heads up, they should send the money back,” he added. Bankman-Fried was arrested in December and most recently <a href="https://blockworks.co/news/sam-bankman-fried-issues-not-guilty-plea">pleaded not guilty to criminal charges</a> that US prosecutors have described as an “epic” fraud.



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News Startup Semafor To Return Funds Linked to FTX Founder

Sam Bankman-Fried, who turned from crypto billionaire to villain nearly overnight, sat for back-to-back interviews this week with appearances at the New York Times DealBook symposium and on Good Morning America.



Observers have drawn comparisons with Bernie Madoff, the Wall Street financier turned Ponzi scheme kingpin, who pleaded guilty to 11 federal crimes. And wewly-appointed FTX CEO John Ray III says FTX’s disintegration is <a href="https://blockworks.co/news/ftx-bankruptcy-like-enron">worse than Enron</a>, the energy company that went down as the largest accounting scandal in recent history. 



Crypto Twitter has dragged mainstream media for massaging Bankman-Fried&#8217;s image instead of asking truly tough questions, although Andrew Sorkin was widely thought to have given him a harder time than most. So, here’s a choice selection of Bankman-Fried corkers to get your blood boiling.



<ol><li>‘Got a little cocky’</li></ol>



Bankman-Fried has echoed several of his comments across interviews, but he was smug enough to admit that he may have been overconfident about the potential of his business.



“I think I got a little cocky — I mean, more than a little bit,” he told <a href="https://edition.cnn.com/2022/12/01/business/sbf-interview-gma/index.html">ABC’s George Stephanopoulous</a> on Good Morning America.



<ol start="2"><li>‘Close to nothing’</li></ol>



<a href="https://www.nytimes.com/2022/12/01/business/sam-bankman-fried-interview-sbf-ftx.html">Speaking virtually to Andrew Sorkin</a> of the New York Times, he claimed that he’s lost most of his money and that he didn’t stash away any of it.&nbsp;



He added that he’s disclosing everything he has, and that he has no hidden funds. He’s allegedly down to $100,000 “or something like that” and just has one working credit card.



<ol start="3"><li>Vacation home was not intended to be parents’ ‘long-term property’</li></ol>



The exchange spent millions on at least 19 properties worth $121 million in the Bahamas, according to <a href="https://www.reuters.com/technology/exclusive-bankman-frieds-ftx-parents-bought-bahamas-property-worth-121-mln-2022-11-22/">Reuters</a>. These included at least seven condominiums worth $72 million and a vacation property in which Bankman-Fried’s parents were listed as signatories.&nbsp;



“I think they may have stayed there while working, you know, with the company sometime over the last year. When you look at the rest of it, there were a lot of property purchases in the Bahamas,” Bankman-Fried told Sorkin.



<ol start="4"><li>Mixed messages</li></ol>



Bankman-Fried made some statements that appeared ill-thought-out when asked whether customer funds were used inappropriately. “I didn&#8217;t knowingly commingle funds,” he said. 



“I wasn’t trying to commingle funds,” he added later.



<ol start="5"><li>Ignorance of FTX/Alameda’s balance sheet</li></ol>



Bankman-Fried admitted to not knowing much about the finances of his companies, saying he was “frankly surprised” by how big Alameda’s position was in FTX’s native token FTT.&nbsp;



He also claimed he was not worried about customer losses or potential insolvency until Nov. 2, when CoinDesk published Alameda&#8217;s partial balance sheet.



<ol start="6"><li>Alleged dark money donations to Republicans</li></ol>



Bankman-Fried claimed he donated millions of “about the same amount” to both Democrats ahead of the 2022 midterm elections. Only his donations to Democrats were <a href="https://www.businessinsider.in/investment/news/ftx-founder-sam-bankman-fried-donated-40-million-to-political-campaigns-leading-into-the-midterms-leaving-some-concerned-about-cryptos-place-in-washington-report-says/articleshow/95646968.cms">publicly known</a> and well-documented, prior to his recent admission. But he kept the Republican donations quiet.&nbsp;



“All my Republican donations were dark,” he said. “The reason was not for regulatory reasons, it’s because reporters freak the f— out if you donate to Republicans. They’re all super liberal, and I didn’t want to have that fight.”



He has denied making any donations to politicians in the Bahamas.



<ol start="7"><li>Spot money and margin money are totally the same</li></ol>



During a Twitter Spaces appearance on Thursday, Bankman-Fried was asked whether funds for spot and margin accounts were commingled behind the scenes.



“Yes that’s right, in general, balances were generally treated as effectively fungible with each other.”



FTX International offered 20x leverage while FTX US offered 10x with a minimum required balance of $100,000.



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Have your own favorite Sam Bankman-Fried media quote or tweet from over the years? Let us know in the thread below!



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<blockquote class="twitter-tweet" data-width="550" data-dnt="true">When asked if his lawyers thought his interviews were a good idea, Bankman-Fried said “They very much do not.” And reading this, you’ll see why… Add your own favorite SBF quotes below!<a href="https://t.co/WatJn8ylfY">https://t.co/WatJn8ylfY</a>&mdash; Blockworks (@Blockworks_) <a href="https://twitter.com/Blockworks_/status/1598770698679242753?ref_src=twsrc%5Etfw">December 2, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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