Celebrities Resolve Legal Wrangle Over FTX Sponsorship Deals
As Sam Bankman-Fried (SBF) readies his defense for an upcoming trial in Manhattan, a noteworthy development has emerged in the legal landscape.
Three celebrity endorsers of the now-defunct FTX cryptocurrency exchange, NFL quarterback Trevor Lawrence of the Jacksonville Jaguars, along with YouTube influencers Kevin Paffrath and Tom Nash, have chosen to reach an amicable settlement in the case.
What Are The Sponsorship Deals That Trevor, Kevin, and Tom Had Entered?
Prior to the collapse of FTX, Trevor had entered into a sponsorship agreement with Blockfolio, an FTX subsidiary, back in 2021. He received $205,555.35 from this arrangement.
During that period, Sina Nader, who then held the position of FTX's COO, emphasised the role of sponsorships with Trevor and other prominent figures in breaking down longstanding barriers associated with cryptocurrency.
He stated that such partnerships were instrumental in officially dispelling misconceptions about the crypto realm.
In reflection of his association with the Blockfolio deal, Trevor had previously expressed his intent to forge a trustworthy, long-term alliance in the cryptocurrency space.
Tom Nash, a notable YouTube influencer boasting a substantial following of 289,000 subscribers, was among those compensated by FTX in exchange for promotional activities.
This financial arrangement came under scrutiny when a class-action complaint was lodged against Tom and other influencers by the Moskowitz Law Firm in March.
According to the complaint, subsequent to the collapse of FTX, Tom and his fellow influencers diligently removed any content from their channels that endorsed the company or its now-controversial founder, SBF.
Notably, Tom, who holds Australian citizenship, initially refrained from responding to the lawsuit, prompting a rather unconventional legal recourse.
The Moskowitz Law Firm sought permission from a federal judge to serve the lawsuit to Tom through a tweet.
@iamtomnash, per the authorization of the Court presiding over the pending class action against you in the Southern District of Florida, you have been served: https://t.co/28YJQ2sKY5
— The Moskowitz Law Firm (@moskowitzesq) May 2, 2023
Kevin, another influencer commanding a substantial audience of 1.88 million subscribers on his 'Meet Kevin' YouTube channel, candidly addressed his previous association with FTX in a video on 17 November 2022.
During this disclosure, he referred to this association as a "scar" and expressed deep regret regarding it.
However, a significant shift in his stance became evident in a subsequent video on 16 March, a mere day after he was named as a defendant in Moskowitz's class-action lawsuit.
In this follow-up video, Kevin reinforced his attribution of responsibility to SBF for the alleged fraudulent activities.
He rejected the notion that influencers bore any responsibility for the losses incurred as a result of FTX's fraudulent actions, dismissing such claims as "ludicrous."
Awaiting Approval From The Judge
While the precise terms of this settlement remain undisclosed, a formal court order, confirming this resolution and removing them from the ongoing legal proceedings, awaits the approval of United States (US) Judge K Michael Moore.
This move raises intriguing questions about the ongoing litigation involving other high-profile celebrities, such as Shaquille O'Neal, Tom Brady, Gisele Bundchen, and Steph Curry, who have faced lawsuits in connection with their promotional roles for FTX.
Legal representatives overseeing these cases have revealed that they are actively engaged in confidential discussions, indicating a substantial possibility of additional settlements within the FTX celebrity endorsement saga.
Furthermore, court records reveal that crypto influencer Ben "BitBoy" Armstrong has been removed from the case.
The filing notes that Ben has not submitted an answer or motion for summary judgment, suggesting a shift in the legal landscape as these complex proceedings unfold.