Approximately 10 months prior to his arrest on fraud charges, the renowned cryptocurrency tycoon Sam Bankman-Fried was captured in a photograph at the 2022 Super Bowl held in Inglewood, California. Standing beside him were the celebrity duo Orlando Bloom and Katy Perry, as well as actress Kate Hudson. In the center, with his arm draped casually over Mr. Bankman-Fried’s shoulder, stood the lesser-known figure, Michael Kives.
Mr. Kives, formerly a Hollywood agent turned investor, played a rather unique role in Mr. Bankman-Fried’s business empire as a super connector. Together with his business partner, Bryan Baum, he assisted the young founder in establishing relationships with prominent individuals such as Mr. Bloom, Ms. Perry, and former President Bill Clinton, while also providing introductions to a wide range of celebrities and influential business leaders, including Leonardo DiCaprio and the governor of Saudi Arabia’s Public Investment Fund.
This partnership proved mutually beneficial. According to court records, Mr. Bankman-Fried invested a staggering $700 million in Mr. Kives’s venture capital firm, despite its limited track record in start-up investments. As part of the agreement, Mr. Kives, the face of the firm, and Mr. Baum each received $125 million.
These individuals, Mr. Kives (42) and Mr. Baum (34), were part of a behind-the-scenes network of intermediaries responsible for connecting celebrities and other powerful figures to the once-thriving crypto industry. Prior to the crash of cryptocurrencies last year, an influx of endorsements from Hollywood stars, professional athletes, business magnates, and politicians added an air of credibility to this volatile and largely unregulated market.
The legal ramifications resulting from the collapse of the crypto industry now shed light on the mechanisms behind these endorsements, exposing the text messages, dinner parties, and friendly introductions that fueled this world of fame, power, and lucrative business deals.
In a recent development, FTX’s bankruptcy lawyers have filed a lawsuit against Mr. Kives’s firm, K5 Global, in an attempt to recover the funds invested by Mr. Bankman-Fried. This $700 million investment represents one of the largest sums contributed by the FTX founder to any group. The lawsuit alleges that Mr. Bankman-Fried made this investment “to enhance his own political and social influence” without conducting adequate due diligence. Furthermore, it claims that Mr. Baum and Mr. Kives were overcompensated and portrays the entire transaction as a fraudulent scheme to enrich the executives.
Federal prosecutors have also charged Mr. Bankman-Fried (31) with a wide-ranging fraud scheme, accusing him of diverting billions of dollars from FTX customers for charitable donations, political contributions, and large-scale investments. He has entered a plea of not guilty.
In response to the lawsuit, Elizabeth Ashford, a spokesperson for K5, stated that they believe the lawsuit is baseless and that K5 genuinely entered into a legitimate, long-term business relationship with Mr. Bankman-Fried. A spokesperson for Mr. Bankman-Fried declined to comment.
Prior to founding K5 in 2018, Mr. Kives, who previously worked as an aide to President Clinton, began his career at Creative Artists Agency in 2003, representing notable actors such as Bruce Willis and Arnold Schwarzenegger. At his wedding in 2019, held in Palm Springs, California, Ms. Perry performed the Jewish folk song “Hava Nagila,” and two writers from “The Office” delivered a humorous roast.
Later, Mr. Baum, an entrepreneur who had co-founded a software company acquired by Lyft, joined forces with Mr. Kives at K5. The firm has made investments in several startups, including Elon Musk’s SpaceX and Boring Company, amassing a notable portfolio of 148 companies. Mr. Kives and Mr. Baum frequently highlighted their extensive network of connections, including their association with billionaire financier Warren E. Buffett.
In an interview, Mr. Buffett characterized Mr. Kives as a “name-dropper” who falsely claimed to have a connection to him. However, Mr. Buffett acknowledged knowing Mr. Kives from his time at Creative Artists Agency and mentioned that Mr. Kives had approached him with a few investment opportunities, which he declined.
Towards the end of 2021, Mr. Kives utilized his network to establish a relationship between Mr. Bankman-Fried and the rising musician Sia. The lawsuit indicates that their initial contact was made through email. Two days before the Super Bowl, Mr. Bankman-Fried attended a party at Mr. Kives’s residence in Beverly Hills, where he interacted with Ms. Perry, Mr. Bloom, and other attendees. During a karaoke session, Ms. Perry reportedly incorporated lyrics referencing FTX into her performance. The following day, she jokingly announced on Instagram that she was joining FTX as an intern.
Later, Mr. Bankman-Fried praised Mr. Kives as one of the most influential individuals he had ever encountered. He even secured living accommodations for Mr. Baum in an apartment complex in the Bahamas, where FTX was headquartered, and granted K5’s partners access to FTX’s internal messaging channels.
In April 2022, Mr. Bankman-Fried organized a four-day cryptocurrency conference in the Bahamas, which was attended by Mr. Bloom, Ms. Perry, and various other high-profile individuals. Among the attendees was Mr. Clinton, whom Mr. Kives had introduced to Mr. Bankman-Fried. At this point, FTX had already established official endorsement deals with celebrities like Tom Brady and Larry David. Ms. Perry had also engaged in discussions about a potential endorsement deal with FTX.
Representatives for Ms. Perry, Mr. Bloom, and Mr. Hudson have stated that FTX did not compensate the actors in any way. The spokesperson for K5, Ms. Ashford, also denied any involvement in brokering FTX’s endorsement deals. However, throughout this period, Mr. Kives and Mr. Baum served as Mr. Bankman-Fried’s guides through the realms of fame, power, and influence.
During the Super Bowl party at Mr. Kives’s residence, Mr. Bankman-Fried had the opportunity to meet Bobby Kotick, the CEO of video game company Activision Blizzard. Recognizing the potential of this connection, Mr. Kives relayed a dinner invitation from Mr. Kotick to Mr. Bankman-Fried in April 2022, as evidenced by messages reviewed by The New York Times.
Around the same time, Mr. Kives reached out to Mr. Musk, encouraging him to collaborate with Mr. Bankman-Fried in the acquisition of Twitter, which Mr. Musk was pursuing. In a message that was disclosed as part of a different lawsuit, Mr. Kives wrote, “Could be cool to do this with Sam Bankman-Fried.”
In June, Mr. Bankman-Fried attended a charity gala at Casa Cipriani in New York, where he crossed paths with Mr. DiCaprio. Upon learning of Mr. DiCaprio’s presence, Mr. Kives texted the actor, suggesting that he engage in a conversation with Mr. Bankman-Fried.
Around the same time, Mr. Kives facilitated Mr. Bankman-Fried’s connection with MasterClass, a platform that offers tutorials by well-known personalities. Specifically, Mr. Bankman-Fried recorded a lesson on cryptocurrencies during the summer, although his segment did not make it into the final version.
Representatives for Mr. Kotick and Mr. DiCaprio declined to comment on these interactions. Mr. Baum also leveraged his network, arranging a meeting between Mr. Bankman-Fried and Nelson Peltz, the billionaire activist investor. Impressed by Mr. Bankman-Fried, Mr. Peltz extended an invitation for him to attend the star-studded wedding of his daughter Nicola and Brooklyn Beckham, the son of David and Victoria Beckham. However, Mr. Bankman-Fried did not attend the event.
Months later, Mr. Baum facilitated a meeting between Mr. Bankman-Fried and Ron DeSantis, the governor of Florida, in Miami. Additionally, he arranged for Mr. Bankman-Fried to appear alongside Larry Fink, the CEO of investment firm BlackRock, at a conference in New York. In October, Mr. Kives proposed connecting Mr. Bankman-Fried with Yasir al-Rumayyan, the leader of Saudi Arabia’s Public Investment Fund, during Mr. Bankman-Fried’s upcoming trip to the Middle East to raise additional funds.
Representatives for Mr. DeSantis, Mr. Fink, and the Saudi fund opted not to comment on these matters.
During November, FTX experienced a crash after a significant decline in deposits…
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