Three of FTX’s celebrity backers have settled a lawsuit filed by investors in the failed exchange.
As Bloomberg News reported Friday (Sept. 16), Jacksonville Jaguars quarterback Trevor Lawrence and YouTube influencers Kevin Paffrath and Tom Nash agreed to settle claims that they helped trick investors into backing Sam Bankman-Fried’s fraudulent cryptocurrency firm.
Terms of the settlement were not revealed. The report noted that the agreements are the first to be reached following a rash of lawsuits against celebrities and sports figures who are accused of promoting Bankman-Fried’s company as it carried out a multibillion dollar fraud.
The trial in that fraud case is set to begin in federal court next month. Thirty-one-year-old Bankman-Fried, who has pleaded not guilty, faces decades in prison if convicted.
Meanwhile, lawsuits are pending against other celebrities who endorsed FTX, among them Tom Brady, Gisele Bundchen, Steph Curry, Shaquille O’Neal and Larry David.
As PYMNTS has reported, Bankman-Fried — like many crypto firms — courted figures from the sporting world to promote his company. Before his company fell, he purchased the naming rights to the Miami Heat’s arena and ran a Super Bowl ad featuring David, co-creator of “Seinfeld” and star of the long-running HBO comedy “Curb Your Enthusiasm.”
The company is also hoping to recover some of the funds paid to O’Neal and other figures from the world of sports.
The news came two days after the now-bankrupt FTX won court approval to sell its cryptocurrency assets to repay customers in U.S. dollars.
The decision by U.S. Bankruptcy Judge John Dorsey in Wilmington, Delaware, is designed to reduce risks associated with price volatility in the crypto markets.
Under the plan, FTX can sell up to $100 million in cryptocurrency per week, and is permitted to enter into hedging and staking agreements to lower the risk of price volatility and earn passive income on more mainstream crypto assets like bitcoin and ether.
The request was made by FTX and received the blessing of the committee representing FTX’s customers in the bankruptcy, along with an ad hoc committee representing non-U.S. customers with deposits on FTX.com’s international exchange.
Dorsey also allowed FTX to increase its liquidation pace to up to $200 million per week, subject to agreement from both creditors committees. FTX has revealed that it owns $3.4 billion in cryptocurrencies, including significant holdings in solana, bitcoin and ether.
Last week also saw reports that FTX is set for a potential revival, with the exchange’s estate having reached out to more than 75 potential bidders since May and gotten several bids.