Sam Bankman-Fried Inks Deal to Help Sue Celebrity FTX Endorsers
Bankman-Fried turns on his celebrity endorsers. | Credit: Michael M. Santiago/Getty Images
Key Takeaways
- Sam Bankman-Fried avoids further lawsuits by helping FTX investors target celebrity promoters and VC firms with information.
- Despite some settlements, big names, including Tom brady and Gisele Bundchen, are fighting the lawsuit alongside venture capital firms.
- Bankman-Fried’s cooperation includes sharing financial details and documents to aid FTX investor recovery efforts.
Sam Bankman-Fried has reached a settlement agreement with a group of FTX customers. In turn, the group of victims has agreed to drop their class action lawsuit against him.
In exchange, he will assist them in pursuing claims against the celebrity promoters of the collapsed exchange. These include the likes of star NFL player Tom Brady, his partner, supermodel Gisele Bundchen and basketball legend Shaquille O’Neal.
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The settlement agreement , which was filed in a Miami court, is still pending judicial approval. If sanctioned, it would absolve Bankman-Fried of both current and future civil liabilities related to the collapse of FTX.
As part of the settlement, Bankman-Fried will supply the plaintiffs’ attorneys with information, including testimony and documents in his possession, to support victim recovery efforts and aid their litigation against various celebrity promoters and venture capital firms that endorsed FTX. Additionally, he has agreed to provide financial details and documents, including an account of his remaining personal assets and his firm’s 2021 investment in the AI startup Anthropic.
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The settlement agreement involving Bankman-Fried emerges shortly after he was convicted of fraud and sentenced to 25 years in prison. The disgraced former billionaire has appealed both his sentence and conviction.
Similarly, his former associates—Caroline Ellison, Nishad Singh, Gary Wang, and FTX lawyer Dan Friedberg—have reached comparable settlement agreements with the plaintiffs’ attorneys.
Additionally, several lesser-known celebrity promoters, including finance YouTubers Andrei Jikh, Graham Stephan, Jaspreet Singh, Tom Nash, Brian Jung, and Jeremy Lefebvre, have settled. They are collectively contributing $1.4 million to a fund supporting the lawsuit, as detailed in court documents.
Big Names Fight Back After Lawrence Settles Lawsuit
When FTX was thriving, Sam Bankman-Fried invested significantly in endorsements to boost the visibility of his business, For instance, a bankruptcy filing disclosed that American Footballer Trevor Lawrence received $500,000 in September 2022.
According to the court documents , a settlement has been reached with Lawrence. The first overall pick by the Jacksonville Jaguars in the 2021 National Football League draft, he became an FTX endorser that same year. His attorney, David A. Rothstein, stated that he could not immediately provide comments on the settlement.
However, many high-profile promoters of FTX, including athletes Tom Brady, Steph Curry, Shaquille O’Neal, Naomi Osaka, Shohei Otani, and supermodel Gisele Bundchen, are contesting the lawsuit. This resistance extends to over a dozen domestic and international venture capital firms as well.
Bankman-Fried was convicted at trial late last year and was sentenced in late March. During the trial, prosecutors showed the 32-year-old diverted customer funds from FTX to its affiliate hedge fund, Alameda Research. He then used the money for political donations, luxury real estate purchases, and speculative investments.
He is currently at the Metropolitan Detention Center in Brooklyn, New York, awaiting transfer to the prison where he will serve his term. The ongoing civil case is titled FTX Cryptocurrency Exchange Collapse Litigation, case number 23-md-03076, in the US District Court for the Southern District of Florida (Miami).
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