Sam Bankman-Fried, the former CEO of the now-defunct crypto exchange FTX, has reached an agreement with a group of investors and customers to cooperate in their class-action lawsuit against celebrity endorsers who promoted the platform. The agreement seeks to resolve current and future civil claims against Bankman-Fried, who is currently serving a 25-year prison sentence for his role in the FTX fraud.
TLDR
- Sam Bankman-Fried (SBF), the disgraced founder of FTX, has agreed to cooperate with investors in a class-action lawsuit against celebrity endorsers of FTX, including Tom Brady, Gisele Bundchen, Larry David, Shaquille O’Neal, and others.
- SBF will provide non-privileged documents and information related to the celebrity endorsers, venture capital firms, legal and accounting firms, and other entities involved with FTX, in exchange for the investors dropping their civil claims against him.
- The investors aim to recover some of their losses from the collapse of FTX, which they allege was a “Ponzi scheme” that cost American consumers over $11 billion.
- SBF has been convicted and sentenced to 25 years in prison for his role in the FTX fraud, but he has appealed the conviction and sentence.
- The settlement with SBF aims to help the investors in their pursuit of other parties involved in the FTX collapse, as they believe the liquidators and legal teams have been impeding their efforts.
Under the terms of the settlement, Bankman-Fried will provide non-privileged documents and information concerning the celebrity endorsers, venture capital firms, legal and accounting firms, and other entities involved with FTX. This includes details about his interactions with stars like Tom Brady, Gisele Bundchen, Larry David, Shaquille O’Neal, Stephen Curry, Naomi Osaka, and others who appeared in FTX’s marketing campaigns.
The investors and customers involved in the class-action lawsuit allege that FTX was a “Ponzi scheme” that cost American consumers over $11 billion in losses. They accuse the celebrity endorsers of deceiving the public by promoting unregistered securities and making false claims about the safety of crypto assets on the FTX platform.
According to the lawsuit, the celebrities were “parties who either controlled, promoted, assisted in, and actively participated in” FTX’s operations, allegedly in breach of Florida law. The suit aims to hold these endorsers accountable for their role in driving consumers to invest in FTX’s yield-bearing accounts and other products.
Jailed FTX founder Sam Bankman-Fried turns on his celebrity endorsers including Tom Brady, Gisele Bundchen and Larry David and agrees to help crypto victims in class-action lawsuit against them https://t.co/DDC64moBKq pic.twitter.com/isIjAVLrq2
— Daily Mail Online (@MailOnline) April 22, 2024
Bankman-Fried, who was once hailed as a crypto wunderkind, has agreed to cooperate with the investors in exchange for dropping their civil liability claims against him. The 32-year-old was convicted by a federal jury in New York in November 2023 on seven counts of fraud, embezzlement, and criminal conspiracy related to the FTX collapse.
In March 2024, Bankman-Fried was sentenced to 25 years in prison and ordered to pay $11 billion in forfeiture. However, he has appealed his conviction and sentence and is currently held at the Metropolitan Detention Center in Brooklyn, New York, pending transfer to prison.
Jailed FTX founder Sam Bankman-Fried turns on celebrity endorsers including Tom Brady, Gisele … https://t.co/O8h0PMFcqP @MailOnline
— Steven J Gross (@calistevenj) April 22, 2024
The settlement with Bankman-Fried is seen as a significant win for the investors and customers, who have faced challenges in their legal efforts against FTX and its associates. Sunil Kavuri, a prominent FTX creditor, described the agreement as a “major win” and accused the FTX liquidators, led by CEO John Ray and the legal firm Sullivan & Cromwell, of impeding the class action endeavors.
By cooperating with the investors, Bankman-Fried aims to aid creditors in their pursuit of other implicated parties and potentially unearth more insights to litigate against any accomplices involved in the exchange’s collapse. The investors hope to leverage the information provided by Bankman-Fried to strengthen their case against the celebrity endorsers and potentially recover a portion of their losses.
As the legal battle surrounding the FTX collapse continues to unfold, the settlement with Bankman-Fried represents a significant development in holding accountable those who may have played a role in the multi-billion-dollar fraud. While the disgraced founder faces a lengthy prison sentence, his cooperation could shed light on the intricate web of entities and individuals involved in the once-prominent crypto exchange.
