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April 24, 2024

About 10 months before his arrest on fraud charges, cryptocurrency tycoon Sam Bankman-Fried posed with a photo The 2022 Super Bowl will be held in Inglewood, California.

On his side was the celebrity couple Orlando Bloom and Katy Perry. On the other side is actress Kate Hudson. Standing in the center is a lesser-known figure: Michael Kieves, with his arm around Mr. Bankman-Fried’s shoulders.

Mr. Keeves, a former Hollywood agent turned investor, plays an unusual role in Bankman-Fried’s business empire: super liaison. He and his business partner, Bryan Baum, helped the young founder build relationships with Mr. Bloom, Ms. Perry and former President Bill Clinton, and introduced him to the Celebrities and business leaders ranging from DiCaprio to the Governor of Saudi Arabia. Arab Public Investment Fund.

The relationship is mutually beneficial. Court records show that Mr. Bankman-Fried invested $700 million in Mr. Keywes’ venture capital firm, an extraordinary backing for a fund with a short track record in investing in start-ups. As part of the deal, the company’s founders and spokespeople, Mr. Kives and Mr. Baum, each received $125 million.

Kieves, 42, and Baum, 34, are members of an obscure network of middlemen who introduce celebrities and other power brokers to the once-robust cryptocurrency industry. Before last year’s cryptocurrency crash, strong support from Hollywood stars, professional athletes, business tycoons and politicians gave the volatile and largely unregulated market an aura of credibility.

Now, the legal ramifications of the cryptocurrency industry’s meltdown offer a window into how these promotions came together, revealing the text messages, dinner parties and goodwill that drive this world of fame, power and big-money deals introduce.

On Thursday, FTX’s bankruptcy lawyers sued Mr. Kives’ firm, K5 Global, to recover funds invested by Mr. Bankman-Fried. The $700 million is one of the largest contributions by the founder of FTX to any syndicate; he made the investment “to enhance his political and social influence,” the suit says.

Mr. Bankman-Fried agreed to invest as much as $3 billion in K5 over three years, according to the lawsuit and a version of the cryptocurrency mogul’s contract with Mr. Kives and Mr. Baum reviewed by The New York Times. The suit alleges that Bankman-Fried failed to conduct any meaningful due diligence and overpaid Baum and Kieves “exorbitantly,” describing the deals as designed to saturate executives. A fraudulent scheme for private pockets.

Federal prosecutors charged Mr. Bankman-Fried, 31, with massive fraud in which he misappropriated billions of dollars from FTX clients for charitable donations, political donations and large investments. He pleaded not guilty.

Elizabeth Ashford, a spokeswoman for K5, said the lawsuit had “no merit” and that K5 had always believed it was entering into a legitimate long-term business relationship with Mr Bankman-Fried. A spokesman for Bankman Freed declined to comment.

A former aide to President Clinton, Mr. Kieves began working at the Creative Artists Agency in 2003, representing actors such as Bruce Willis and Arnold Schwarzenegger. At Mr. Kives’ 2019 wedding in Palm Springs, California, Ms. Perry sang “Hava Nagila”,” a Jewish folk song, the two writers of “The Office” complained about.

Kives founded K5 in 2018.He was later joined by the entrepreneur Mr. Baum, the A software company acquired by Lyft. K5 has invested in start-ups such as SpaceX and the Boring Company, which is run by Elon Musk, and has a portfolio of 148 companies.

When building K5, Mr. Kives and Mr. Baum brag about their relationshipincluding billionaire financier Warren E. Buffett.

Buffett said in an interview that Keeves is a “claimant” who “could claim that he was connected to me, but that’s not the case.” Buffett said he knew Keeves while working at the Creative Artists Agency. Since then, Kieves has contacted him about some investment opportunities, which he declined, he said.

In late 2021, Kieves used his network to form a relationship with Bankman-Fried, who rose to fame with the cryptocurrency boom. They got in touch via email, and Kieves introduced Bankman-Freed to musician Sia, the suit says.

Two days before last year’s Super Bowl, Bankman-Fried attended a party at the Keeves home in Beverly Hills, Calif., where he spent time with Ms. Perry and Mr. Bloom, according to four people familiar with the matter. time. During the karaoke session, Ms. Perry performed a song that included lyrics about FTX, three people familiar with the matter said.the next day she wrote She announced on Instagram that she was giving up her music career to become an FTX intern.

Bankman-Fried later praised Kieves as one of the most well-connected people he had ever met, the lawsuit says. He reserved space for Mr. Baum in an apartment building in the Bahamas, where FTX is headquartered, the suit says. He also gave K5’s partners access to FTX’s internal messaging channels.

In April 2022, Mr. Bankman-Fried hosted a four-day cryptocurrency conference in the Bahamas. Mr. Bloom and Ms. Perry attended the event at the Nassau Bahama Resort and dined with Mr. Bankman-Fried and other high-profile visitors.

Also present was another public figure Mr. Keeves introduced him to Mr. Bankman-Fried: Mr. Clinton appeared on a panel with the FTX founder.

By then, FTX had formal endorsement deals with celebrities like Tom Brady and Larry David. Ms. Perry also held talks with FTX about official recognition, according to three people familiar with the matter.

Perry’s manager, Martin Kirkup, declined to comment on endorsement talks and said her Instagram post was a “joke.” Representatives for Ms. Hudson and Mr. Bloom said FTX did not compensate the actors in any way. Ms. Ashford, a K5 spokeswoman, said the company had not brokered any formal endorsement deals with FTX.

But for months, K5 Partners has acted as a tour guide for Mr. Bankman-Fried, leading him through the corridors of fame and power.

At the Super Bowl party hosted by Kievs, Bankman-Fried also met with Bobby Kotick, chief executive of the video game company Activision Blizzard, according to a person familiar with the matter. Kieves tried to foster the relationship, passing on Kotick’s dinner invitation to Bankman-Fried in April 2022, according to sources seen by The Times.

Keeves also texted Musk that month, urging him to team up with Bankman-Fried to acquire Twitter, which Musk is pursuing. “It might be cool to do this with Sam Bankman-Fried,” Kieves wrote in a message released last year amid a separate lawsuit.

Last June, Mr. Bankman-Fried attended a charity event festival Casa Cipriani in New York. Mr. DiCaprio was also in attendance at the event. When Keeves found out, he texted the actor and encouraged him to speak with Bankman-Fried, according to a person familiar with the matter.

Around the same time, Kieves put Bankman-Fried in touch with MasterClass, a website that offers celebrity tutorials, according to three people familiar with the matter. Mr. Bankman-Fried filmed a class on cryptocurrencies last summer, people familiar with the matter said. Snippets of him were cut from the final version.

Representatives for Kotick and DiCaprio declined to comment.

Mr. Baum also tapped into his network. Last year, he arranged a meeting between Bankman-Fried and billionaire activist investor Nelson Peltz, four people familiar with the matter said. Mr. Peltz was so impressed with the FTX founder that he invited Mr. Bankman-Fried to the star-studded event Wedding of daughter Nicola and Brooklyn BeckhamAccording to emails obtained by The Times, Beckham is the son of David and Victoria Beckham. (Mr. Bankman-Fried was not in attendance.)

A few months later, Baum helped Bankman-Fried and his brother Gabe arrange a meeting in Miami with Florida Gov. Ron DeSanti, according to three people familiar with the matter and a source reviewed by The Times. to meet.

Then in October, he arranged for Mr. Bankman-Fried Appear He spoke with Larry Fink, chief executive of investment firm BlackRock, at a conference in New York, three people familiar with the matter said. Later that month, Kieves offered to sponsor Bankman-Fried, who was traveling to the Middle East to raise funds, with Yasir Rumayyan, head of Saudi Arabia’s Public Investment Fund, according to sources obtained by The Times. al-Rumayyan).

Representatives for DeSantis, Fink and the Saudi fund declined to comment.

In November, FTX crashed after a deposit run exposed an $8 billion breach in its account. The lawsuit says Baum and Kieves contacted private equity firms and billionaires to help Bankman-Fried raise cash to save the company.

Nobody came to rescue FTX. Keeves and Baum have not spoken publicly about their relationship with Bankman-Fried since FTX filed for bankruptcy.

Mr. Kieves continued to network. In May, he and his wife, Lydia, hosted a dinner at their Beverly Hills home, according to information reviewed by The Times. Invited front-line guests include Hillary Clinton, Kris Jenner, Olivia Wilde, Mr. DiCaprio and Ms. Perry.

Karen Browning contributed to the report. Research Contributors: Kitty Bennett, Susan C. Beach, Alain Delacquerier and Sheila McNeill.





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