Disgraced FTX founder Sam Bankman-Fried funded half a dozen media companies

Disgraced former FTX CEO Sam Bankman-Fried financially backed half a dozen media outlets including ProPublica, Vox and the Intercept, it has emerged.

SBF’s crypto exchange sensationally collapsed earlier this month, after the company filed for bankruptcy amid reports it owes billions of dollars to customers. 

But the repercussions could be even more far-reaching, with one media outlet warning it has a ‘significant hole’ in its budget now FTX has folded. 

In a letter to staff, The Intercept’s acting editor-in-chief Roger Hodge said that due to the collapse, the news website is reliant on other donors ‘stepping forward’ to make up for the shortfall. 

The letter states the company had expected to receive a total of $3.25 million from SBF over the next two years, but that all further payments are on hold. The Intercept received $500,000 from the disgraced CEO in September and another $250,000 was due in December. 

The grant money was given through the philanthropic entity Building a Stronger Future Foundation – and was disclosed in the media outlet’s reporting about FTX.

One section of the letter reads: ‘I knew from our coverage that SBF was quickly becoming a polarizing figure. But I also knew our reporters would never pull their punches because of a donation – and they didn’t’  

The letter concludes with a plea for contributions, saying: ‘As of today, we have a significant hole in our budget. If you are able, please consider donating today to support The Intercept’s crusading independent journalism.’ 

During his time as FTX CEO, SBF was a regular presence at major summits, appearing with the likes of Bill Clinton while receiving the support of major celebrities such as Gisele, Larry David and Steph Curry. 

Other recipients of FTX’s grants include Semafor, The Law and Justice Journalism Project and an unspecified podcast.

ProPublica, which was also a beneficiary of SBF’s generosity, issued a statement on its grant agreement with the foundation on November 11, the day FTX filed for bankruptcy. 

ProPublica said it was owed $3.3 million from SBF after previously receiving $1.7 million – but that it was not anticipating the deal being honored. 

Twitter owner Elon Musk has slammed reports that SBF owns a stake in Twitter as ‘false,’ something that was first reported by Semafor, an outlet that was founded by former New York Times reporter Ben Smith. 

He hit back with a tweet that read: ‘Semafor is owned by SBF. This is a massive conflict of interest in your reporting. Journalistic integrity is [trash].’

Musk also poked fun at SBF’s activities in funding media outlets with a tweet that said: ‘If SBF was as good at running a crypto exchange as he was at bribing media, FTX would still be solvent!’

Earlier this month, Musk admitted he held conversations with SBF about possible funding regarding the Tesla founder’s acquisition of Twitter. 

However, the South African said: ‘I talked to him for about half an hour, and I know my bull***t meter was redlining. It was like, this dude is bull***t – that was my impression.’ 

In a feature on SBF’s media funding, Reason’s Robby Soave wrote: ‘Is it perhaps the case that SBF thought he was actually buying goodwill and favorable coverage? He was, as it happens, the beneficiary of countless gushing magazine profiles and was frequently hailed as the “white knight” of crypto.’

Soave also claimed the New York Times’ coverage of FTX’s demise used ‘soft, passive language to disguise blame at every turn.’ It has also been confirmed that SBF will appear remotely at the Times’ upcoming Dealbook Summit. 

According to Puck News’ Theodore Schleifer, SBF’s interest in media went beyond donating millions, as the former billionaire also hired former journalists and made them part of his inner circle.  

John Ray, who was named FTX’s chief executive after the company filed for bankruptcy on November 11, said in a court filing earlier this month that the lapses in oversight, security and corporate governance he identified were greater than in any other process he has managed in his 40 years as a bankruptcy specialist, including at Enron.

‘Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,’ Ray said in the filing, with the District of Delaware bankruptcy court.

SBF used $10 billion in client funds to prop up his hedge fund Alameda Research, which had suffered losses when its bets on crypto ventures soured, Reuters has previously reported. That left FTX with insufficient funds to cover withdrawals when a plunge in the value of one of its currencies, FTT, triggered a bank run.

While Ray’s filing does not provide a full account of FTX’s demise, it details several lapses that contributed to the downfall.

An Alameda entity had lent $2.3 billion to an FTX entity, while SBF and FTX co-founders and top executives Nishad Singh and Ryan Salame had collectively borrowed $1.6 billion from Alameda, according to the filing. More such ‘related party’ transactions are listed in the filing, though details are not offered.

FTX funds were also used to buy homes and other personal items for employees and advisors, Ray wrote. Some of these money transfers were not documented as company loans, while the homes were registered under the names of the employees, Ray added.

Proper checks and balances were absent, according to the filing. Employees submitted payment requests through an on-line ‘chat’ platform and supervisors approved them with personalized emojis, the filing states.

SBF often communicated through applications that were set to auto-delete after a short period of time and encouraged employees to do the same, Ray wrote.

Most of the financial statements Ray reviewed were not audited. He said he harbored ‘substantial concerns’ for statements he found that were audited because they relied on Prager Metis, an accounting firm operating in the virtual world on metaverse platform Decentraland.

Just this week, Joe Rotunda, director of enforcement at the Texas State Securities Board, said that his office was looking into the celebrities who endorsed FTX.

Rotunda told Bloomberg that celebrity endorsements were not the top priority in his state probe of FTX’s collapse, but were part of a broader investigation into potential violations.

The state regulator said he is investigating what payments the celebrity endorsers received for touting FTX, which collapsed in bankruptcy earlier this month, as well as what kind of disclosures they made.

It’s unclear how FTX compensated its various celebrity endorsers, though in some cases the company is believed to have offered equity stakes in exchange for promoting its brand.