Report: News Startup Semafor Looks to Buy Out Bankman-Fried

Media startup Semafor is reportedly seeking to buy out investor Sam Bankman-Fried.

The effort, reported Wednesday (Jan. 18) by the New York Times, adds Semafor to a growing list of organizations and people that have tried to separate themselves from Bankman-Fried, the disgraced founder of collapsed cryptocurrency exchange FTX.

“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,” Semafor co-founder and CEO Justin Smith told the Times.

The report noted that Bankman-Fried was the company’s largest investor thanks to a $10 million contribution. Sources tell the newspaper Semafor’s efforts to find funding have so far yielded no new investments.

Semafor isn’t the only media company to which Bankman-Fried had donated. Last month, the nonprofit newsroom ProPublica announced it would return a grant funded by a Bankman-Fried family foundation.

The grant was meant to support investigations into the COVID-19 pandemic, biosecurity and public health preparedness, the organization said in a news release.

ProPublica also said it ended its relationship with the foundation “following allegations of fraudulent activities against Sam Bankman-Fried.”

Last month also saw the founders of the Solana blockchain try to distance themselves from the former FTX CEO.

“I’m still trying to square what I perceive him to be and like what actually happened,” Solana’s Anatoly Yakovenko said. “It just feels really, really jarring.”

Bankman-Fried was charged by the U.S. Department of Justice (DOJ) in December with eight criminal counts that range from wire fraud to various conspiracy counts. He could face decades in prison if found guilty at his trial, scheduled for later this year.

The 30-year-old former crypto wunderkind has insisted he is innocent in the events that led to the downfall of his company and the loss of billions of missing customer funds.

Free on bail and living at his parents’ house, Bankman-Fried has also maintained a high profile, writing a blog post last week about how he could save his former company.

He also supplied a comment for Bloomberg News this week wishing the best to former FTX President Brett Harrison. Harrison had just published a lengthy Twitter thread blasting Bankman-Fried and trying to distance himself from the collapse of his former company.

“I never could have guessed that underlying these kinds of issues — which I’d seen at other more mature firms in my career and believed not to be fatal to business success — was multi-billion-dollar fraud,” Harrison wrote, adding that he was “shocked” by Bankman-Fried’s alleged fraud.