Semafor To Buy Back Bankman-Fried’s Stake — Report

New York-based news startup Semafor is looking to buy back Sam Bankman-Fried’s stake in the company as the disgraced FTX co-founder faces fraud charges, according to a New York Times report.

The company raised nearly $25 million before its launch in October, with Bankman-Fried’s stake being about $10 million, according to the report.

The company is looking to buy out Bankman-Fried’s ownership as it simultaneously raises new money, per the report. The startup expects to put the money in a separate account until it receives guidance from authorities on how to return the investment, Semafor co-founder and CEO Justin Smith told The Times.

Cutting ties

Semafor is one of only hundreds of startups Bankman-Fried and his affiliates invested in over the last few years. Many of those firms are now looking to get out of their entanglement with him and his now-bankrupt crypto exchange, FTX.

Media startups seem especially interested in cutting any ties with Bankman-Fried. Last month, ProPublica said it would return the initial $1.6 million it received in what was supposed to be a three-year, $5 million grant, from Bankman-Fried’s and his family’s Building a Stronger Future foundation. The non-profit newsroom said it would sever its relationship with the foundation.

Bankman-Fried is charged with eight criminal counts, including allegations of wire fraud and conspiracy to commit money laundering. He was released from custody on $250 million bail last month.

Further reading:

• Funding To Web3 Startups Plummets 74% in Q4
• FTX Collapse Will Reverberate Throughout The VC World For A Long Time
• Mergers & Money: FTX-Induced Crypto Contagion Likely Only Starting
• Crypto Exchange Kraken Cuts Workforce; U.S. Pushing More Industry Regulation
• How VCs Invest In Crypto Will Be Changed By FTX’s Spectacular Fall
• Silvergate Capital Lays Off 40% Of Staff As FTX-Induced Contagion Strikes Again

Illustration: Dom Guzman

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