FTX investors and Sam Bankman-Fried reach an agreement to seek celebrities as promoters

Cooperation from Bankman-Fried may strengthen the case that investors have against the promoters of FTX.

Sam Bankman-Fried, the former CEO of FTX, and the exchange’s investors have reached a settlement that will put an end to their legal battles. In return, the investors will ask Bankman-Fried to help them sue FTX’s celebrity endorsers.

The settlement intends to finally satisfy all claims that FTX investors have made against Bankman-Fried, subject to the permission of the court in the Southern District of Florida. After serving 25 years in jail for fraud, this deal would release him from any further civil prosecution.

Bankman-Fried has agreed to “shall reasonably assist with class counsel” in the class action lawsuit against FTX by providing records and testimony to aid in victim recovery efforts. His investments in Anthropic, an artificial intelligence business, are detailed in these records.

Along with his business and celebrity relationships, Bankman-Fried would be forthcoming about his associations with Tom Brady, Stephen Curry, Naomi Osaka, Kevin O’Leary, and Gisele Bündchen, among many others.

After the crypto exchange FTX went bankrupt in November 2022, its investors sued in a class action suit, claiming that Sam Bankman-Fried, the co-founder, and the exchange itself had broken Florida law by misrepresenting clients. Investors lost billions of dollars, according to the complaint.

Notable figures who advocated for yield-bearing accounts (YBAs), which FTX has been under fire for, are also named in the lawsuit. The plaintiffs claim that these endorsements played a role in increasing investor interest in the unregulated accounts, which in turn contributed to their financial losses when FTX stopped customers from withdrawing funds.

Included in the list of defendants is the renowned legal firm Sullivan & Cromwell (S&C). A number of creditors launched a new complaint against the company in February, claiming it was complicit in FTX’s deceptive dealings. The expected benefit for the investors from the settlement with the promoters of FTX is $1.3 million.

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