The super connector who built Sam Bankman-Fried’s celebrity world

Michael Kives is a co-founder and managing partner at K5 Global. (Image: NYT)

About 10 months before he was arrested on fraud charges, cryptocurrency mogul Sam Bankman-Fried posed for a photograph at the 2022 Super Bowl in Inglewood, California. On one side of him were Orlando Bloom and Katy Perry, the celebrity couple. On the other was actor Kate Hudson. Standing in the center, with his arm slung over Bankman-Fried’s shoulder, was a lesser-known figure: Michael Kives.

Kives, a Hollywood agent turned investor, played an unusual role in Bankman-Fried’s business empire: super connector. He and his business partner, Bryan Baum, helped the young founder cultivate relationships with Bloom, Perry and former President Bill Clinton, and offered introductions to a who’s who of celebrities and business leaders. The relationship was mutually beneficial. Bankman-Fried invested $700 million in Kives’ venture capital firm, court records show. Kives, the founder and face of the firm, and Baum each received $125 million as part of the deal.

Kives, 42, and Baum, 34, were part of an under-the-radar network of middlemen who introduced celebrities and other power brokers to the once highflying crypto industry. Before cryptocurrencies crashed last year, a drumbeat of endorsements from Hollywood stars, professional athletes, business titans and politicians created an aura of credibility around the volatile and largely unregulated market.

On Thursday (June 22, 2023), FTX’s bankruptcy lawyers sued Kives’ firm, K5 Global, to recover the money that Bankman-Fried had invested. The $700 million was among the largest sums the FTX founder contributed to any group; the lawsuit said he had made the investment “to burnish his own political and social influence.”

Bankman-Fried agreed to invest as much as $3 billion over three years in K5, according to the lawsuit and a version of the crypto mogul’s contract with Kives and Baum that was reviewed by The New York Times. The complaint argued that Bankman-Fried had done no meaningful due diligence and “excessively” overpaid Baum and Kives, describing the transactions as a fraudulent scheme to enrich executives.

Federal prosecutors have charged Bankman-Fried, 31, with a sweeping fraud in which he siphoned billions of dollars from FTX customers to make charitable donations, political contributions and large investments. He has pleaded not guilty.

A spokesperson for K5, Elizabeth Ashford, said that the lawsuit was “without merit” and that K5 had believed it was entering a legitimate, long-term business relationship with Bankman-Fried. A spokesperson for Bankman-Fried declined to comment.

This article originally appeared in The New York Times.

By David Yaffe-Bellany and Erin Griffith

c.2023 The New York Times Company