Settlement Agreement Reached by SBF and FTX Victims: Withdrawal of SBF Lawsuit in Pursuit of Collaborative Pursuit of Civil Liability for “Celebrity Endorsers”

A group of victims of bankrupt cryptocurrency exchange FTX announced on Friday that they have reached a settlement agreement with Sam Bankman-Fried (SBF), the founder of FTX who was recently sentenced to prison. The victims have agreed to drop their claims against SBF in exchange for his assistance in holding responsible the celebrities who promoted FTX. If approved by the judge, the agreement will relieve SBF of any civil liability. Other former FTX executives, including Gary Wang, Caroline Ellison, and Nishad Singh, who testified against SBF, have also agreed to settle. These former executives have begun providing information to assist the plaintiffs in holding celebrities, sports stars, and influencers accountable for promoting FTX. As part of the settlement agreement, SBF has agreed to assist the plaintiffs’ lawyers in investigating FTX endorsers. He will provide all non-privileged documents, detail his assets, his investment in the AI startup Anthropic, a sworn statement of his negative net worth, and documents related to other defendants in the civil lawsuit. SBF will also provide information about venture capital investments in FTX and the accountants and lawyers who worked with FX. After FTX collapsed in November 2022, victims of FTX filed a collective lawsuit against SBF and celebrity endorsers, including NBA star Stephen Curry, Lakers Hall of Famer Shaquille O’Neal, MLB star Shohei Ohtani, and Japanese tennis champion Naomi Osaka, accusing them of promoting unregistered securities and luring investors into a Ponzi scheme. If successful, the victims’ compensation could far exceed the amount they would have received by pursuing their claims. The settlement agreement includes a payment of approximately $1.3 million to the endorsers.