- Three prominent endorsers of the now-defunct FTX cryptocurrency exchange have settled claims related to deceiving investors during the empire’s collapse
- The settlements are the first of what is expected to be a flurry of such agreements involving celebrities, sports figures, and investment firms who promoted FTX
- FTX was known for its extensive endorsement deals involving celebrity athletes and sports teams
Three prominent endorsers of the now-defunct FTX cryptocurrency exchange, including NFL quarterback Trevor Lawrence, have agreed to settle claims that they were involved in deceiving investors during the collapse of the once all-conquering empire. The details of these settlement agreements were not disclosed in recent court filings but they mark the start of what will likely be a flurry of such settlements. Stars of stage, screen, and field were all involved in promoting FTX and have been included in a class action lawsuit by FTX customers.
FTX Was Famed for its Endorsements
More than a dozen celebrities, sports figures, and investment firms were accused of enabling what prosecutors describe as one of the largest frauds in US history orchestrated by former CEO Sam Bankman-Fried. The likes of Tom Brady, Gisele Bundchen, Steph Curry, Shaquille O’Neal, and Larry David also face lawsuits, which have been consolidated in FTX Cryptocurrency Exchange Collapse Litigation in the US District Court, Southern District of Florida.
FTX was famed for its huge endorsement deals to appeal to the masses, utilizing the fame of celebrity athletes, sports teams, and even acquiring naming rights to the Miami Heat’s arena. Lawyers leading the $1 billion case against endorsers noted in the filing that they are engaged in ongoing confidential settlement discussions with other defendants and anticipate reaching additional settlements.
Trustee Trying to Recover Millions
Investors’ lawyers have also expressed their desire to coordinate mediations with attorneys overseeing FTX’s bankruptcy case to resolve claims. A trustee tasked with gathering FTX assets is exploring the possibility of recovering millions in payments made to professional athlete promoters.
Attorneys representing the celebrities argue that the investors’ claims lack merit because the endorsements didn’t encourage individuals to deposit money into FTX accounts. They also contend that the endorsers had no role in alleged losses tied to FTX’s misappropriation and mismanagement.
Some celebrity endorsers, such as YouTube influencers Kevin Paffrath and Tom Nash, removed their FTX endorsements from their channels and issued apologies in video form, according to the lawsuit.