Semafor has become the latest media outlet that will be returning a roughly $10 million fund given by disgraced CEO FTX Sam Bankman-Fried, or SBF.
- Semafor follows fellow media outlets ProRepublica and Vox Media in returning funds from FTX founder Sam Bankman-Fried.
- The media outlet that was launched less than three months ago is now looking for new funds.
- Bankman-Fried is currently out on a $250 million bond that requires him to stay at his parent's home in California.
Elon Musk Slammed Semafor
Launched less than three months ago by Justin B. Smith, the former CEO of Bloomberg Media Group and Ben Smith, the former editor-in-chief of BuzzFeed News and media columnist at The New York Times, Semafor came under fire after the FTX meltdown when it published an article that alleged Musk had asked Bankman-Fried for $100 million.
Musk criticized the story by tweeting, "As I said, neither I nor Twitter has taken any investment from SBF/FTX. Your article is a lie. Now, I’m asking again, how much of you does SBF own?"
Semafor's co-founder and Editor-in-Chief, Ben Smith, responded to Musk's tweet by saying, "Like you and many others, we took an investment from him. We have covered him aggressively, and disclose it every time we write about him.''
Semafor Wants to Come Clean
According to Crunchbase data, Sam Bankman-Fried made investments in Semafor as part of a $25 million funding round.The media outlet defined itself as an outlet that is rebuilding trust from the audience on its website, and probably that's why after receiving criticism, it decided to buy out Sam Bankman-Fried's ownership while it explores raising new funds. The plan is to place the money into a separate account until Semafor receives guidance from the relevant legal authorities as to where the money should be returned.
The Bottom Line
Semafor is one of several media companies that received funding from Mr. Bankman-Fried. For instance, ProPublica, the nonprofit investigative news outlet, received $5 million from Sam Bankman-Fried's family foundation and has announced returning the $1.6 million. Vox received $200,000 from SBF's family. The Block's Chief Executive Officer, Michael McCaffrey, had to resign after failing to disclose a series of loans from Sam Bankman-Fried's Alameda Research.
The FTX fallout has put media companies that accepted FTX's money in the crosshairs, so they want to distance themselves from Sam Bankman-Fried. As credibility is on the line, any association with FTX and Bankman-Friend could be seen as a risk.