Media startup says it will buy back $10 million SBF stake: Report
Media startup Semafor said on Jan. 18 that it will attempt to buy back former FTX CEO Sam Bankman-Fried’s $10 million stake in the company, according to a Jan. 18 report from the New York Times. The report stated that Semafor will seek to raise money from other sources to make up what it is giving back.
Scoop: Sam Bankman-Fried invested roughly $10 million of Semafor’s $25 million round, making him the company’s biggest outside investor. Semafor is buying back his interest and putting that money into a separate account while it raises new $$$https://t.co/3KQ5SwpDxQ
— Ben Mullin (@BenMullin) January 18, 2023
The $10 million was part of a $25 million seed funding round that allowed Semafor to get started with its news site, which launched in October.
Semafor is the latest in a string of news sites and political groups that have said they will return money given to them by the failed crypto exchange and its executives.
Semafor had disclosed the investment on Dec. 2, but at the time did not commit to returning the money, saying only that it would consult with attorneys and government agencies before deciding what to do next. This new report quoted the company’s co-founder, Justin Smith, as stating that “we are planning to repurchase Sam Bankman-Fried’s interest in Semafor, and to place the money into a separate account until the relevant legal authorities provide guidance as to where the money should be returned.”
Bankman-Fried was a frequent contributor to politicians and media groups, and critics have accused him of attempting to use these contributions to influence the narrative about his companies. Some companies have sought to distance themselves from him and his firms since the crypto exchange he founded went bankrupt. On Dec. 9, the CEO of crypto news site The Block resigned after it was discovered that he had obtained loans from Alameda Research, a subsidiary of SBF’s FTX Group, that he had not disclosed publicly.
The Block’s new CEO has called this lack of disclosure “a serious lack of judgment” on the part of the previous CEO, while strongly denying that the deal affected the company’s editorial decisions.
FTX filed for bankruptcy in November after suffering a liquidity crisis that prevented it from being able to honor withdrawals. SBF himself has been arrested on fraud charges and pleaded not guilty on Jan. 3.