About 10 months before he was arrested on fraud charges, cryptocurrency mogul Sam Bankman-Fried said: photograph At the 2022 Super Bowl in Inglewood, California.
Next to him was Orlando Bloom and Katy Perry, a celebrity couple. Another is actress Kate Hudson. Standing in the center with his arm on Mr. Bankman-Fried’s shoulder was a little-known figure, Mr. Michael Kyves.
Kyves, a Hollywood agent-turned-investor, played the unusual role of a superconnector in Bankman-Fried’s business empire. He and business partner Brian Baum have helped young founders build relationships with Bloom, Perry and former President Bill Clinton, and have worked with celebrities and business leaders from Leonardo DiCaprio to the governor-general of Saudi Arabia. introduced the portrait of Arabian Public Investment Fund.
This relationship was mutually beneficial. Bankman-Fried invested $700 million in Kyves’ venture capital firm, an unusual level of support for a fund with little track record of investing in startups, according to court records. The company’s founders and faces, Kyves and Baum each received $125 million as part of the deal.
Kaibus, 42, and Baum, 34, were part of a low profile network of brokers that introduced celebrities and other power brokers to the once thriving cryptocurrency industry. Before the crypto crash last year, the drumbeat of support from Hollywood stars, professional athletes, businessmen and politicians created an aura of trust in a volatile and largely unregulated market.
Now, the legal aftermath of the collapse of the cryptocurrency industry offers a window into how these promotions worked, and the text messages, dinner parties that inspired this world of fame, power and big money trading. , revealing a friendly introduction.
On Thursday, bankruptcy attorneys for FTX sued Kyves’ company K5 Global for recovery of funds invested by Bankman-Fried. This $700 million was one of the highest amounts ever given by an FTX founder to any group. He made the investment “to enhance his own political and social influence,” according to the complaint.
Bankman-Fried has agreed to invest up to $3 billion in K5 over three years, according to the complaint and a version of the contract between cryptocurrency mogul Kyves and Baum reviewed by The New York Times. It says. The complaint alleges that Bankman-Fried failed to conduct meaningful due diligence and paid Baum and Kyves “excessively” and overpaid, and that the deal was a fraudulent scheme to enrich executives. I explained that there is.
Federal prosecutors have charged Bankman-Fried, 31, with massive fraud that siphoned billions of dollars from FTX customers for charitable contributions, political contributions and major investments. he pleaded not guilty.
K5 spokeswoman Elizabeth Ashford said the lawsuit was “without merit” and that K5 believed it had a legitimate and long-term business relationship with Bankman-Fried. A spokeswoman for Bankman-Fried declined to comment.
A former aide to President Clinton, Kyves began working at the Creative Artists Agency in 2003, representing actors such as Bruce Willis and Arnold Schwarzenegger. At Kyves’ 2019 wedding in Palm Springs, Calif. Perry sang “Hava Nagila”.‘, Jewish folk song, and two authors of ‘The Office’ delivered the roast.
Kybs founded K5 in 2018. He was then joined by co-founder and entrepreneur Mr. Baum. Software company acquired by Lyft.K5 has invested in startups such as Elon Musk’s SpaceX and The Boring Company, amassing a portfolio of 148 companies.
Keeves and Baum building K5 advertised their connectionThat includes billionaire investor Warren E. Buffett.
Buffett said in an interview that Kyves “may sell to me that he has a connection to me, but he doesn’t” and is a “name dropper”. Buffett said he knew Kyves since he was at the Creative Artists Agency. Since then, Kaives has contacted him about several investment opportunities, but he turned them down, he said.
In late 2021, Kaibus used his network to establish a relationship with Bankman-Fried, who was rising in prominence with the cryptocurrency boom. According to the complaint, the two communicated by email, and Kybs introduced Bankman-Fried to the musician, Sia.
Two days before last year’s Super Bowl, Bankman-Fried attended a party at Kyves’ home in Beverly Hills, Calif., where he spent time with Perry and Bloom, according to four people familiar with the matter. During the karaoke session, Perry performed a song that incorporated lyrics about FTX, according to three people familiar with the matter.the next day she I have written He posted on Instagram that he was quitting music to become an intern at FTX.
Mr. Bankman-Fried later praised Mr. Kyves as one of the most connected people he had ever met, according to the complaint. The lawsuit alleges that Mr. Baum reserved space for Mr. Baum in a condominium in the Bahamas where FTX is based. And he gave K5 partners access to his FTX internal messaging channels.
In April 2022, Bankman-Fried hosted a four-day cryptocurrency conference in the Bahamas. Bloom and Perry attended an event at Nassau’s Baha Mar Resort and dined with Bankman Fried and other prominent visitors.
Other celebrities also attended The person Mr. Kybs introduced to Mr. Bankman-Fried: Mr. Clinton who appeared in a panel discussion with the founder of FTX.
By then, FTX had formal endorsement deals with celebrities like Tom Brady and Larry David. Perry has also met with FTX about an official endorsement, according to three people familiar with the matter.
Perry’s manager, Martin Kirkup, declined to comment on the endorsement talks, saying the Instagram post was a “joke”. Representatives for Hudson and Bloom said FTX did not compensate the actors in any way. K5 spokesperson Ashford also said the company does not broker any of FTX’s formal endorsement deals.
But for months, K5’s partners acted as bankman-Fried’s tour guides through the corridors of fame and power.
At Kyves’ Super Bowl party, Bankman-Fried also met with Bobby Kotick, chief executive of video game company Activision Blizzard, according to people familiar with the matter. According to a message seen by The Times, Kyves sent an invitation to dinner from Mr. Kotick to Mr. Bankman-Fried in April 2022 in an effort to foster ties.
That same month, Kybs also texted Musk, urging him to work with Bankman-Fried on Musk’s ongoing acquisition of Twitter. “It might be cool to do this with Sam Bankman-Fried,” Kyves wrote in a message released as part of another lawsuit last year.
Last June, Bankman-Fried joined a charity Gala At Casa Cipriani in New York. DiCaprio was also present at the event. Upon learning of this, Kyves texted the actor and encouraged him to speak with Bankman-Fried, according to a person familiar with the matter.
Around the same time, Kybs had Bankman-Fried contact celebrity tutorial site Masterclass, according to three people familiar with the matter. Bankman-Fried filmed a cryptocurrency class last summer, according to people familiar with the matter. His segment was removed from the final version.
Representatives for Kotik and DiCaprio declined to comment.
Baum also tapped into his own network. Last year, he arranged a meeting between Bankman-Fried and billionaire activist investor Nelson Peltz, according to four people familiar with the matter.Peltz was so impressed with the FTX founder that he invited Bankman-Fried to a star-studded event Wedding of daughter Nicola and Brooklyn BeckhamThe son of David and Victoria Beckham, according to an email obtained by The Times. (Mr. Bankman-Fried was not present.)
A few months later, Baum plans to schedule a meeting between Bankman Fried and his brother Gabe with Florida Governor Ron DeSantis in Miami, according to three people familiar with the matter and a message seen by The Times. It is said that he helped
And in October he arranged for Mr. Bankman-Fried to: appear He met with BlackRock CEO Larry Fink at a conference in New York, three people familiar with the matter said. Later in the month, Kibez connected Bankman Freed, who was in the Middle East to raise funds, to Yasir al-Rumayyan, the leader of Saudi Arabia’s public investment fund, according to a message obtained by The Times. offered.
DeSantis, Fink and representatives of the Saudi Foundation declined to comment.
In November, FTX went bust after a bank run revealed an $8 billion hole in its accounts. Baum and Kyves contacted private equity firms and billionaires to help Bankman-Fried raise money to save the company, according to the complaint.
No one came to help FTX. Kybs and Baum have not spoken publicly about their relationship with Bankman-Fried since FTX filed for bankruptcy.
Kaibus continues to network. In May, he and his wife Lydia hosted a dinner at their home in Beverly Hills, according to a message confirmed by The Times. The A-list invitees included Hillary Clinton, Kris Jenner, Olivia Wilde, DiCaprio and Perry.
Kellen Browning contributed to the report. The research was contributed by Kitty Bennett, Susan C. Beachy, Alain Dracheriere and Sheerag McNeill.
