About 10 months before he was arrested on fraud charges, cryptocurrency mogul Sam Bankman Freed posed for a photo at the 2022 Super Bowl in Inglewood, California.
Next to him was a celebrity couple, Orlando Bloom and Katy Perry. Another actress is Kate Hudson. Standing in the center with his arm draped over Bankman Freed's shoulder was a little-known figure, Michael Kives.
Mr. Kaibs, a Hollywood agent turned investor, played the unusual role of super-connector in Mr. Bankman Fried's business empire. He and business partner Brian Bohm helped the young founder develop relationships with Mr. Bloom, Mr. Perry and former President Bill Clinton, and with celebrities and business leaders ranging from Leonardo DiCaprio to the governor of Saudi Arabia. Introduced the character of Arabian Public Investment Fund.
This relationship was mutually beneficial. According to court records, Bankman Fried has invested $700 million in Kaibs' venture capital firm, an unusual level of support for a fund with a limited track record of investing in startups. Mr. Kaibs and Mr. Boehm, the company's founder and face, each received $125 million as part of the deal.
Mr. Kaibs, 42, and Mr. Baum, 34, were part of a network of low-profile intermediaries that introduced celebrities and other power brokers to the once-flourishing cryptocurrency industry. Before crypto crashed last year, a drumbeat of support from Hollywood stars, professional athletes, business leaders and politicians created an aura of confidence in a volatile and largely unregulated market.
Now, the legal fallout from the collapse of the cryptocurrency industry offers a window into how these promotions took place, and the text messages, dinner parties that fueled this world of fame, power, and big-money deals. , reveals a friendly introduction.
On Thursday, FTX's bankruptcy lawyers sued Mr. Kaibs' company, K5 Global, seeking to recover the money invested by Mr. Bankman Freed. His $700 million donation was one of the largest donations ever made by an FTX founder to any group. The complaint says he made the investments “to increase his own political and social influence.”
Bankman Freed agreed to invest up to $3 billion in K5 over three years, according to the complaint and a version of the cryptocurrency mogul's contract with Kaibs and Bohm reviewed by the New York Times. That's what it means. The complaint alleges that Bankman Freed failed to conduct meaningful due diligence and overpaid Boehm and Keives “excessively” and called the deal a fraudulent scheme to enrich its executives. I explained that there is.
Federal prosecutors have charged Bankman Fried, 31, with a massive fraud that siphoned billions of dollars from FTX customers for charitable donations, political contributions and large investments. He pleaded not guilty.
K5 spokeswoman Elizabeth Ashford called the lawsuit “without merit” and said K5 believed it had a legitimate, long-term business relationship with Bankman Freed. A spokeswoman for Bankman Freed declined to comment.
Mr. Kives, a former aide to President Clinton, began working at Creative Artists Agency in 2003, representing actors such as Bruce Willis and Arnold Schwarzenegger. At Mr. Kaibs' 2019 wedding in Palm Springs, Calif., Mr. Perry sang the Jewish folk song “Hava Nagila,” and two “The Office” writers delivered a roast.
Kives launched K5 in 2018. He was later joined by Baum, an entrepreneur who co-founded a software company that was acquired by Lyft. K5 has invested in startups such as Elon Musk's SpaceX and The Boring Company, and has amassed a portfolio of 148 companies.
In building K5, Mr. Keives and Mr. Boehm touted their connections to billionaire investor Warren E. Buffett and others.
Mr. Buffett said in an interview that Mr. Kives is a “name-dropper'' who “may sell himself as having a connection to me, but he isn't.'' Mr. Buffett had known Mr. Kaibs from his time at Creative Artists Agency, he said. Since then, he said Mr. Kaibs has approached him about several investment opportunities, which he declined.
In late 2021, Kaibs used his network to forge a relationship with Bankman Freed, who was rising to prominence with the crypto boom. The two communicated via email, and Mr. Kaibs introduced Mr. Bankman-Freed to Mr. Thea, a musician, according to the complaint.
Two days before last year's Super Bowl, Mr. Bankman-Fried attended a party at Mr. Kives' home in Beverly Hills, California, where he spent time with Mr. Perry, Mr. Bloom and others, four people familiar with the matter said. According to three people involved, during the karaoke session, Perry performed a song that included lyrics about FTX. The next day, she wrote on Instagram that she was quitting her music to become an intern at FTX.
Bankman Freed then praised Kaibs, calling him one of the most connected people he had ever met, according to the complaint. According to the complaint, he had reserved space for Boehm at an apartment complex in the Bahamas, where FTX is based. And he granted K5's partners access to his FTX internal messaging channels.
In April 2022, Bankman Freed hosted a four-day cryptocurrency conference in the Bahamas. Mr. Bloom and Mr. Perry attended an event at the Baha Mar Resort in Nassau, where they dined with Mr. Bankman Fried and other notable visitors.
Also in attendance was Clinton, another public figure introduced to Bankman Fried by Keives, who participated in a panel discussion with the FTX founder.
By then, FTX had formal endorsement deals with celebrities like Tom Brady and Larry David. Mr. Perry also met with FTX regarding official support, three people familiar with the matter said.
Perry's manager, Martin Kirkup, declined to comment on the endorsement deal and said the Instagram post was a “joke”. Representatives for Mr. Hudson and Mr. Bloom said that FTX did not compensate the actors in any way. K5 spokesperson Ashford also said the company does not broker any officially approved transactions for FTX.
But for months, K5's partners served as Mr. Bankman Fried's tour guides through the corridors of fame and power.
At Kaibs' Super Bowl party, Bankman-Fried also met with Bobby Kotick, CEO of video game company Activision Blizzard, according to people familiar with the matter. In April 2022, Mr. Kaibs extended a dinner invitation from Mr. Kotick to Ms. Bankman-Fried, in an effort to foster the relationship, according to messages seen by the Times.
That same month, Mr. Keives also sent a text message to Mr. Musk, urging him to work with Bankman Freed on Mr. Musk's acquisition of Twitter. “It might be cool to do this with Mr. Sam Bankman Freed,” Kaibs wrote in a message released as part of a separate lawsuit last year.
Last June, Bankman Fried attended a charity gala at Casa Cipriani in New York. Mr. DiCaprio also attended the event. When Mr. Kaibs found out, he texted the actor and suggested he speak with Mr. Bankman Fried, according to a person familiar with the matter.
Around the same time, Mr. Kaibs had Mr. Bankman Fried contact MasterClass, a tutorial site run by celebrities, according to three people familiar with the matter. According to people familiar with the matter, Bankman Freed filmed a class on virtual currencies last summer. His segment was removed from the final version.
Representatives for Kotick and DiCaprio declined to comment.
Bohm also tapped into his own network. Last year, he set up a meeting with Bankman Fried and billionaire activist investor Nelson Peltz, four people familiar with the matter said. Mr. Peltz was so impressed with the FTX founder that he attended the star-studded wedding of his daughter Nicola and David Beckham and Victoria Beckham's son Brooklyn Beckham, according to emails obtained by the Times. He is said to have invited Mr. (Mr. Bankman Freed was not present.)
In the coming months, Mr. Bohm scheduled a meeting with Mr. Bankman Fried and his brother Gabe with Florida Gov. Ron DeSantis in Miami, according to three people familiar with the matter and messages seen by the Times. He said he helped.
And in October, Bankman Fried arranged for Bankman Fried to attend a meeting in New York with Larry Fink, CEO of investment firm BlackRock, three people familiar with the matter said. Later that month, Kibes offered to connect Bankman Freed, who was in the Middle East to raise money, with Yasir al-Rumayan, head of Saudi Arabia's Public Investment Fund, according to messages obtained by The Times. Ta.
Representatives for Mr. DeSantis, Mr. Fink and the Saudi Fund declined to comment.
In November, FTX collapsed after a deposit run revealed an $8 billion hole in its accounts. Mr. Boehm and Mr. Kaibs contacted private equity firms and billionaires to help Mr. Bankman Freed scrape together money to save the company, according to the complaint.
No one came to help FTX. Mr. Keives and Mr. Boehm have not said anything publicly about their relationship with Bankman Fried since FTX filed for bankruptcy.
Mr. Kaibs continues to network. In May, he and his wife Lydia hosted a dinner party at their home in Beverly Hills, according to messages reviewed by the Times. A-list invitees included Hillary Clinton, Kris Jenner, Olivia Wilde, DiCaprio and Perry.
Kellen Browning Contributed to the report. Contributing to the research were kitty bennett, Susan C. Beachy, alain draquelier and Sealag McNeil.
