Failed crypto exchange FTX‘s investors have reportedly settled with former FTX CEO Sam Bankman-Fried in order to pursue key promoters.
As first reported by Bloomberg, the agreement could release the crypto exchange co-founder from claims. In return, SBF may provide assistance so the concerned parties can pursue celebrities who had promoted FTX.
Recently, a group of FTX investors, as well as certain customers, have reportedly agreed to take back their claims against disgraced FTX co-founder Sam Bankman-Fried in return for his cooperation against various other defendants in an extensive set of lawsuits over the virtual currency exchange’s spectacular demise.
The said agreement, if/when approved by the case judge, could relieve Bankman-Fried from civil liability shortly after he had been sentenced to 25 years in prison for engaging in fraudulent activities and for stealing billions from FTX.
As per the latest settlement, submitted on Friday in federal court in Miami, plaintiffs in the litigation could address all outstanding claims against SBF now as well as in the foreseeable future.
Other former FTX / Alameda executives, including Gary Wang, Caroline Ellison as well as Nishad Singh, who had proceeded to testify against SBF, had been sued by investors as well.
However, they’ve also agreed to settle.
They’ve started by providing key details to assist the plaintiffs’ case, as per the court papers.
Now, that leaves the influential celebrities, famous sports figures as well as prominent social media personalities who heavily pushed FTX to unsuspecting investors and clients.
In exchange for removing him from the wide-ranging lawsuit, SBF has reportedly agreed to assist plaintiffs’ legal representatives with coming after the other FTX promoters.
As mentioned in the suggested settlement, Sam Bankman-Fried could turn over key nonprivileged information revealing his assets and his investment in AI firm Anthropic, an affidavit confirming his personal net worth to be effectively zero (or negative), as well as key details regarding other defendants in the extensive litigation.
The list of case defendants is quite lengthy, following a number of lawsuits filed following the FTX collapse that had been consolidated into a single case in Miami.
Financiers as well as celebrity promoters such as sports sensation Tom Brady as well as Shaquille O’Neal, and Brazilian model Gisele Bundchen have all been accused of pushing the failed crypto exchange’s unregistered securities and convincing investors to take part in a fraudulent scheme.
As per the recent agreement, SBF will offer key details that he can furnish regarding any VCs that also placed investments into FTX as well as accountants and legal teams that worked closely with the digital currency exchange.
Should they prevail, the plaintiffs might get a lot more than they seem to be giving up in this matter. The settlements with various pushers in the agreement are valued at around $1.3 million, the filing states.
Notably, when FTX was still afloat, SBF had spent a lot of money on major endorsements in order to boost the profile of his crypto venture while leveraging the influence of Hall of Fame athletes and other iconic stars.
For instance, an FTX affiliate had revealed in a bankruptcy filing that professional football star Trevor Lawrence was given a $500,000 payment back in September 2022.
This latest settlement reportedly includes a deal with Lawrence.
Botnick stated:
“Since the collapse of FTX, Mr Bankman-Fried has been singularly focused on returning the estate’s assets to customers, who could and should be made whole as of current prices,”
While referring to a legal representative for the plaintiffs, Botnick noted:
“He looks forward to continuing to work with Adam Moskowitz and his team to do so.”
When requesting the Judge handling the case to approve the settlement, the plaintiffs’ legal team stated that they accounted for the unpredictable outcome and potential risk of litigation versus SBF and though he could be valuable to the remaining litigation.
As widely reported, SBF had been convicted at trial towards the end of 2023, and then sentenced in March of this year.
Case prosecutors demonstrated that SBF pilfered user assets from FTX to its closely-associated hedge fund Alameda Research to spend lavishly on various political campaign donations, sprawling real estate and sensational investments.
At present, Sam Bankman-Fried is in custody at the Metropolitan Detention Center in Brooklyn, New York. He is expected to get transferred to the prison where he is scheduled to serve out his term.
SBF intends to appeal his 25-year sentence and conviction.
The civil litigation is FTX Cryptocurrency Exchange Collapse Litigation, 23-md-03076, US District Court, Southern District of Florida (Miami).
