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Sam Bankman-Fried’s $10 million in investment in Semafor will be held in custody until authorities decide its fate

sam bankman-friedSam Bankman-Fried.

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  • Sam Bankman-Fried invested $10 million in news startup Semafor, according to the New York Times.
  • The money was part of a funding round that raised a total of $25 million.
  • The funds from SBF will be repurchased and placed in a separate account to await legal review. 

Semafor wants to repurchase Sam Bankman-Fried’s investment in the media startup that the New York Times said amounts to $10 million.

The disgraced FTX founder had been known to be Semafor’s biggest outside investor, and TheWrap reported earlier this month that Semafor has been planning to give it back.

But the scale of Bankman-Fried’s investment was unknown until Wednesday’s New York Times report. His $10 million investment was part of an initial funding round that raised a total of $25 million. Now Semafor is exploring ways to buy out that stake.

“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,” cofounder Justin Smith told the Times.

Meanwhile, FTX’s current management has been scrambling to recover assets that could be returned to creditors as part of its bankruptcy process.

Smith also has maintained that SBF’s investment didn’t give him any tangible shares in Semafor thanks to its dual-class ownership. 

If Bankman-Fried’s stake had been converted to equity, then he would have been entitled to a single-digit minority stake, according to the Financial Times

Semafor has the right to buy back an investor’s stake in the event of any criminal activity or behavior that harms the company.

Semafor wasn’t the only news outlet that accepted funds from the fallen crypto king, who pleaded not guilty earlier this month to fraud charges in connection with the collapse of FTX. 

ProPublica, the investigative non-profit, said last month that it will return the $1.6 million it received in what was supposed to be a three-year, $5 million grant from Bankman-Fried. Vox Media has also said it would return funds from SBF in light of the charges against him.

Read the original article on Business Insider