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Former FTX CEO to Provide Evidence Against Celebrity Endorsers in Exchange for Civil Liability Release
- Sam Bankman-Fried reaches a settlement agreement with FTX customers, agreeing to assist in pursuing celebrity promoters in exchange for dropping the civil lawsuit against him.
- Bankman-Friedâs former colleagues and some smaller celebrity promoters have already settled with the plaintiffs.
- High-profile celebrities and venture capital firms continue to fight the lawsuit.
Sam Bankman-Fried, the disgraced founder of the collapsed cryptocurrency exchange FTX, has reached a settlement agreement with a group of FTX customers who filed a class action lawsuit against him. According to court documents filed in Miami on Friday, Bankman-Fried has agreed to help the plaintiffsâ attorneys in their efforts to recover funds from celebrity promoters and venture capital firms that endorsed FTX. In exchange, the customers will drop their civil lawsuit against him.
Under the terms of the agreement, Bankman-Fried has committed to assisting the plaintiffsâ attorneys in their efforts to recover funds from celebrity promoters and venture capital firms that had publicly endorsed or invested in FTX. These high-profile individuals and organizations played a role in lending credibility to the exchange, potentially influencing customersâ decisions to invest in the platform.
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Sam Bankman-Friedâs Settlement Agreement
The agreement still requires judicial approval. But it says that Bankman-Fried will provide testimony, documents, and financial information to assist the plaintiffsâ attorneys in their litigation efforts. This includes disclosing his remaining personal assets and details of his firmâs 2021 investment in AI startup Anthropic. If approved, the settlement will release Bankman-Fried from both current and future civil liability related to FTXâs collapse.
The settlement comes on the heels of Bankman-Friedâs conviction for fraud and his subsequent sentencing to 25 years in prison for his role in FTXâs implosion. Despite appealing his conviction and sentence, Bankman-Fried has chosen to cooperate with the plaintiffsâ attorneys.
Cooperation from Former Colleagues and Smaller Promoters
Several of Bankman-Friedâs former colleagues and co-defendants, including Caroline Ellison, Nishad Singh, Gary Wang, and FTX lawyer Dan Friedberg, have already reached similar settlement agreements with the plaintiffs. Additionally, some smaller celebrity promoters, such as finance YouTubers Andrei Jikh, Graham Stephan, Jaspreet Singh, Tom Nash, Brian Jung, and Jeremy Lefebvre, have contributed to a common fund of $1.4 million to support the lawsuit. Jacksonville Jaguars quarterback Trevor Lawrence, who received $500,000 in 2022 to endorse FTX subsidiary Blockfolio, also settled with the plaintiffs last year.
High-Profile Celebrities and Venture Capital Firms Resist Settlement
However, many high-profile celebrities who promoted FTX, including athletes Tom Brady, Steph Curry, Shaquille OâNeill, Naomi Osaka, and Shohei Otani, as well as supermodel Gisele Bundchen, continue to fight the lawsuit. More than a dozen domestic and international venture capital firms are also contesting the legal action.
The settlement agreement marks a significant development in the ongoing legal battles surrounding the collapse of FTX, as investors seek to recover their losses from those who promoted the now-defunct cryptocurrency exchange. As the case progresses, it remains to be seen how successful the plaintiffsâ attorneys will be in their pursuit of the celebrity promoters and venture capital firms that backed FTX.
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