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About 10 months earlier than he was arrested on fraud expenses, the cryptocurrency mogul Sam Bankman-Fried posed for {a photograph} on the 2022 Tremendous Bowl in Inglewood, Calif.
On one facet of him have been Orlando Bloom and Katy Perry, the celeb couple. On the opposite was the actress Kate Hudson. Standing within the heart, together with his arm slung over Mr. Bankman-Fried’s shoulder, was a lesser-known determine: Michael Kives.
Mr. Kives, a Hollywood agent turned investor, performed an uncommon function in Mr. Bankman-Fried’s enterprise empire: tremendous connector. He and his enterprise accomplice, Bryan Baum, helped the younger founder domesticate relationships with Mr. Bloom, Ms. Perry and former President Invoice Clinton, and provided introductions to a who’s who of celebrities and enterprise leaders, from Leonardo DiCaprio to the governor of Saudi Arabia’s Public Funding Fund.
The connection was mutually helpful. Mr. Bankman-Fried invested $700 million in Mr. Kives’s venture-capital agency, court docket information present, a unprecedented degree of help for a fund with a brief observe report of start-up investments. Mr. Kives, the founder and face of the agency, and Mr. Baum every obtained $125 million as a part of the deal.
Mr. Kives, 42, and Mr. Baum, 34, have been a part of an under-the-radar community of middlemen who launched celebrities and different energy brokers to the as soon as high-flying crypto business. Earlier than cryptocurrencies crashed final yr, a drumbeat of endorsements from Hollywood stars, skilled athletes, enterprise titans and politicians created an aura of credibility across the risky and largely unregulated market.
Now the authorized fallout from the crypto business’s collapse provides a window into how these promotions got here collectively, revealing the textual content messages, dinner events and pleasant introductions that fueled this world of fame, energy and big-money deal-making.
On Thursday, FTX’s chapter attorneys sued Mr. Kives’s agency, K5 World, to get well the cash that Mr. Bankman-Fried had invested. The $700 million was among the many largest sums the FTX founder contributed to any group; the lawsuit mentioned he had made the funding “to burnish his personal political and social affect.”
Mr. Bankman-Fried agreed to speculate as a lot as $3 billion over three years in K5, in keeping with the lawsuit and a model of the crypto mogul’s contract with Mr. Kives and Mr. Baum that was reviewed by The New York Instances. The grievance argued that Mr. Bankman-Fried had completed no significant due diligence and “excessively” overpaid Mr. Baum and Mr. Kives, describing the transactions as a fraudulent scheme to counterpoint executives.
Federal prosecutors have charged Mr. Bankman-Fried, 31, with a sweeping fraud through which he siphoned billions of {dollars} from FTX clients to make charitable donations, political contributions and enormous investments. He has pleaded not responsible.
A spokeswoman for K5, Elizabeth Ashford, mentioned that the lawsuit was “with out benefit,” and that K5 had believed it was coming into a professional, long-term enterprise relationship with Mr. Bankman-Fried. A spokesman for Mr. Bankman-Fried declined to remark.
A former aide to President Clinton, Mr. Kives began working for Inventive Artists Company in 2003, representing actors like Bruce Willis and Arnold Schwarzenegger. At Mr. Kives’s 2019 wedding ceremony in Palm Springs, Calif., Ms. Perry sang “Hava Nagila,” a Jewish folks music, and two writers on “The Workplace” delivered a roast.
Mr. Kives began K5 in 2018. He was later joined by Mr. Baum, an entrepreneur who had co-founded a software program firm that was acquired by Lyft. K5 has invested in start-ups together with SpaceX and Boring Firm, that are run by Elon Musk, amassing a portfolio of 148 firms.
As they constructed K5, Mr. Kives and Mr. Baum touted their connections, together with with the billionaire financier Warren E. Buffett.
In an interview, Mr. Buffett mentioned Mr. Kives was a “name-dropper” who “may pitch that he has a connection to me, however he doesn’t.” Mr. Buffett mentioned he had recognized Mr. Kives from his time at Inventive Artists Company. Since then, he mentioned, Mr. Kives has contacted him about a number of funding alternatives, which he declined.
In late 2021, Mr. Kives used his community to forge a relationship with Mr. Bankman-Fried, who was rising in prominence as cryptocurrencies boomed. They received in contact over e-mail, the lawsuit mentioned, and Mr. Kives launched Mr. Bankman-Fried to the musician Sia.
Two days earlier than the Tremendous Bowl final yr, Mr. Bankman-Fried attended a celebration at Mr. Kives’s dwelling in Beverly Hills, Calif., the place he frolicked with Ms. Perry and Mr. Bloom, 4 individuals aware of the matter mentioned. Throughout a karaoke session, three of the individuals mentioned, Ms. Perry carried out a music that included lyrics about FTX. The following day, she wrote on Instagram that she was quitting music to grow to be an FTX intern.
Mr. Bankman-Fried later raved that Mr. Kives was one of the linked individuals he had ever met, the lawsuit mentioned. He reserved area for Mr. Baum in an condominium advanced within the Bahamas, the place FTX was primarily based, the lawsuit mentioned. And he gave K5’s companions entry to FTX’s inside messaging channels.
In April 2022, Mr. Bankman-Fried hosted a four-day crypto convention within the Bahamas. Mr. Bloom and Ms. Perry joined the occasion on the Baha Mar resort in Nassau, eating with Mr. Bankman-Fried and different high-profile guests.
Additionally in attendance was one other public determine whom Mr. Kives had launched to Mr. Bankman-Fried: Mr. Clinton, who appeared on a panel with the FTX founder.
By then, FTX had struck formal endorsement offers with celebrities like Tom Brady and Larry David. Ms. Perry additionally held talks with FTX about an official endorsement, three individuals aware of the matter mentioned.
Ms. Perry’s supervisor, Martin Kirkup, declined to touch upon the endorsement talks and mentioned her Instagram publish was a “joke.” Representatives for Ms. Hudson and Mr. Bloom mentioned FTX had not compensated the actors in any method. And Ms. Ashford, the K5 spokeswoman, mentioned the agency had not brokered any of FTX’s formal endorsement offers.
However for months, the K5 companions acted as Mr. Bankman-Fried’s tour guides by way of the corridors of fame and energy.
At Mr. Kives’s Tremendous Bowl occasion, Mr. Bankman-Fried additionally met Bobby Kotick, the chief govt of the online game firm Activision Blizzard, an individual aware of the matter mentioned. Mr. Kives tried to foster the connection, relaying a dinner invitation from Mr. Kotick to Mr. Bankman-Fried in April 2022, in keeping with messages seen by The Instances.
That month, Mr. Kives additionally texted Mr. Musk, urging him to hitch forces with Mr. Bankman-Fried on the acquisition of Twitter, which Mr. Musk was pursuing. “Could possibly be cool to do that with Sam Bankman-Fried,” Mr. Kives wrote in a message that was launched as a part of a unique lawsuit final yr.
Final June, Mr. Bankman-Fried attended a charity gala at Casa Cipriani in New York. Mr. DiCaprio was additionally on the occasion. When Mr. Kives came upon, he texted the actor, encouraging him to talk with Mr. Bankman-Fried, an individual aware of the matter mentioned.
Across the identical time, Mr. Kives put Mr. Bankman-Fried in contact with MasterClass, a website for tutorials by well-known individuals, three individuals aware of the matter mentioned. Mr. Bankman-Fried filmed a lesson on cryptocurrencies final summer season, the individuals mentioned. His phase was dropped from the ultimate model.
Representatives for Mr. Kotick and Mr. DiCaprio declined to remark.
Mr. Baum additionally tapped into his community. Final yr, he arrange a gathering between Mr. Bankman-Fried and Nelson Peltz, the billionaire activist investor, 4 individuals aware of the matter mentioned. Mr. Peltz was impressed sufficient with the FTX founder that he invited Mr. Bankman-Fried to the star-studded wedding ceremony of his daughter Nicola and Brooklyn Beckham, the son of David and Victoria Beckham, in keeping with emails obtained by The Instances. (Mr. Bankman-Fried didn’t attend.)
Months later, Mr. Baum helped Mr. Bankman-Fried and his youthful brother, Gabe, schedule a gathering in Miami with Ron DeSantis, Florida’s governor, in keeping with three individuals aware of the matter and messages seen by The Instances.
Then in October, he organized for Mr. Bankman-Fried to look with Larry Fink, the chief govt of the funding agency BlackRock, at a convention in New York, three individuals aware of the matter mentioned. Later that month, Mr. Kives provided to attach Mr. Bankman-Fried — who was touring to the Center East to boost cash — with Yasir al-Rumayyan, the chief of Saudi Arabia’s Public Funding Fund, in keeping with messages obtained by The Instances.
Representatives for Mr. DeSantis, Mr. Fink and the Saudi fund declined to remark.
In November, FTX imploded after a run on deposits uncovered an $8 billion gap in its accounts. Mr. Baum and Mr. Kives contacted non-public fairness corporations and billionaires to assist Mr. Bankman-Fried pull collectively money to save lots of the corporate, in keeping with the lawsuit.
None got here to FTX’s rescue. Mr. Kives and Mr. Baum have mentioned nothing publicly about their relationship with Mr. Bankman-Fried since FTX filed for chapter.
Mr. Kives has continued to community. In Could, he and his spouse, Lydia, hosted a dinner at their Beverly Hills dwelling, in keeping with messages reviewed by The Instances. The A-list invitees included Hillary Clinton, Kris Jenner, Olivia Wilde, Mr. DiCaprio and Ms. Perry.
Kellen Browning contributed reporting. Analysis was contributed by Kitty Bennett, Susan C. Beachy, Alain Delaquérière and Sheelagh McNeill.
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