Retired basketball great Shaquille O’Neal has agreed to pay $1.8 million to settle a lawsuit. This lawsuit is related to the collapse of cryptocurrency exchange FTX. It’s hard to believe that this Bahamas-based company was the third-largest cryptocurrency exchange in the world only three years ago. It ultimately experienced an epic crash, causing at least $30 billion in loss and later filing for Chapter 11 bankruptcy protection.
FTX compounded its financial gymnastics by skyrocketing to fame through high-cost celebrity endorsements. Celebrities such as Larry David, Tom Brady, Shaquille O’Neal, Stephen Curry, and Naomi Osaka dazzled in their commercials that dominated the day. The company faced an intense public backlash as investigations by state and federal authorities started rolling in. These questions focused on the fraud claims facing FTX and founder Sam Bankman-Fried. Specifically, they allege that he violated his customers’ deposits by investing them in projects without the depositors’ approval.
In 2022, O’Neal was dealt an unexpected blow—a lawsuit. It asserted that he and other celebrities contributed to their promotion of FTX as a safe investment through their paid endorsements. The lawsuit claimed that these endorsements misled potential investors about the safety and reliability of the platform. Unfortunately, the platform hit the deep end of financial woes.
In exchange for the payment, the proposed settlement will provide O’Neal with a sweeping release from any future claims arising out of this issue. Under the terms of the settlement, O’Neal will be compensated. Accompanying that settlement will be a payment from the defendant. This payment should come within 30 days of the settlement being concluded.
FTX’s dramatic collapse has had a long tail impact on its celebrity endorsers. This unfortunate event underscores the increasing accountability calls for influencer marketing in the crypto space. As investigations continue, the impact of this case will only continue to inform the way that celebrities endorse products in financial industries.
