Semaphore, a global media company launched by Justin Smith and Ben Smith just two and a half months ago, plans to return the investment it received from accused crypto entrepreneur Sam Bankman-Fried, according to circumstance. A person familiar with the matter told TheWrap.
“The company intends to redeem the investment,” he said, cautioning against using the word “return,” but was unable to identify the difference between redemption and simply returning the investment.
A Semafor spokesperson declined to disclose the value of Bankman-Fried’s investment in the company’s $25 million seed round in June, but issued the following statement to TheWrap: Did.
“We are actively cooperating with the relevant legal and governmental bodies managing this situation to ensure the most ethical and responsible legal action for Sam Bankman-Fried’s creditors and the ongoing judicial process.” We are following guidance on the most appropriate next steps to ensure an outcome.”
Bankman-Fried was released on December 22 with a $250 million bond package while he awaits trial over the collapse of the FTX cryptocurrency exchange.
Before the exchange’s demise, Bankman-Fried donated millions of dollars to political candidates, mostly Democrats, and invested or donated to numerous media companies, both personally and through his family foundation. .
ProPublica, the nonprofit that does the research, said it would return $5 million in donations in late December. We have ended our relationship with the Building a Stronger Future Foundation following allegations of misconduct against Sam Bankman-Fried. “
This donation was intended to support journalistic investigations into ongoing questions about the COVID-19 pandemic, biosecurity, and public health preparedness.
However, Semafor was less clear about its investment intentions, including disclosing the amount. The lack of clarity is especially true with editor-in-chief Ben Smith, one of the most famous media pundits in the United States and most recently a columnist for the New York Times. On-air leads to his trolling. CEO Justin Smith has a similarly serious media pedigree as the former CEO of Bloomberg Media Group.
Bankman-Fried invested in Semafor’s pre-seed round in May 2022, raising a total of $25 million to launch the company in October, according to Justin Smith. Other investors include David Bradley, former owner of Atlantic magazine, Jessica Lessin, CEO of The Information, investor John Thornton, and Jorge Paolo Lemann, co-founder of 3G Capital.
In a memo to staff shared on Twitter on Dec. 2, Smith said Bankman-Fried’s investment has not yet been converted into stock. (In theory, this should make it easier to return cash.) In that same note, Smith said government agencies investigating cryptocurrency founders before deciding what to do. said he was waiting for “guidance” from
“While we continue to monitor the legal situation closely, the best we can do is continue to report this story with the relentless tenacity our audiences have come to expect of us. ‘ Smith wrote.
Bankman-Fried was arrested in the Bahamas three weeks ago and accused of billions of dollars in fraud and mismanagement of the FTX crypto fund he founded, which is now bankrupt.
The investment in Semafor is privately made by Bankman-Fried. The company launched in late October.
A person familiar with Semafor’s strategy said Bankman-Fried’s failure to ethically return the funds to itself made returning the investment difficult. As such, the person said Semafor is awaiting guidance from government prosecutors on how best to respond.
