FTX Hopes to Recover Payments to Shaq and Other Sports Stars

In its heyday, FTX paid millions to professional athletes to promote its platform.

Now, the cryptocurrency company is hoping to get that money back.

As Bloomberg News reported Friday (Sept. 8), the company’s advisers have been studying if payments made to sports figures such as NBA legend Shaquille O’Neal and tennis star Naomi Osaka can be recovered.

The report noted that disclosures will likely provide the most detailed picture of how FTX boosted its stature by using its ties to the sporting world

Of course, FTX wasn’t alone in this, with a number of crypto companies spending millions to air ads during the 2022 Super Bowl, six months before FTX’s collapse.

Crypto firms spent more on Super Bowl ads — which can cost up to $7 million for a 30-second spot — in 2022 than airlines, quick-service restaurants, and wine and spirits companies.

Another platform, Crypto.com, spent $700 million to win the right to rechristen Los Angeles’ Staples Center after itself, while FTX struck a 19-year deal for naming rights to the former American Airlines Arena, home to the Miami Heat.

“It’s a way to get our name out there,” FTX founder Sam Bankman-Fried said last year of the company’s Super Bowl commercial. “In terms of venues to do that, it’s hard to find a higher-profile one than this.”

By the end of 2022, Bankman-Fried would be facing multiple criminal charges tied to the multi-billion dollar collapse of its firm. 

And a number of celebrities who had endorsed the company – former Patriots quarterback Tom Brady and “Curb Your Enthusiasm” star/“Seinfeld” creator Larry David among them – have found themselves facing a class-action suit accusing them of promoting unregistered securities.

O’Neal was also sued in April after managing to avoid being served for three months. 

Earlier this year, the Securities and Exchange Commission (SEC) warned celebrities to be careful about endorsing cryptocurrencies after announcing that former NBA star Paul Pierce would pay a $1.4 million penalty for failing to reveal that he had been paid to endorse the cryptocurrency ethereumMax (EMAX).

“This case is yet another reminder to celebrities: The law requires you to disclose to the public from whom and how much you are getting paid to promote investment in securities, and you can’t lie to investors when you tout a security,” SEC Chair Gary Gensler said at the time.