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Shaquille O’Neal’s $1.8 million settlement over his promotion of fallen crypto exchange FTX might wind up being a great deal. Remaining athletes and celebrities in the litigation—including Tom Brady, Steph Curry, and David Ortiz—could still be on the hook for billions in total damages.
The NBA legend this week agreed to pay $1.8 million to settle claims against him in a suit over the collapse of FTX. That’s over $1 million more than the roughly $750,000 O’Neal was paid to promote FTX. It was already known he was settling. O’Neal and FTX investors announced in April they had reached a deal; the terms were disclosed in a legal filing Monday.
The $1.8 million settlement is not chump change, although the actual payout to class members may be meager. Court documents state the class could include more than a million people, meaning that—without taking into account attorneys’ fees and other costs—individual payouts could be as little as less than $2 per class member.
O’Neal might think twice before signing up to promote his next crypto or NFT (non-fungible token) project (he paid $11 million in November to settle a suit over allegations he promoted but then fled an NFT project, Astrals, which caused its value to drop dramatically). But the decision to settle the FTX claims actually represents a big win for O’Neal, according to Adam Moskowitz, an attorney for the FTX investors.
Moskowitz tells Front Office Sports the FTX settlement was only reached due to a relationship built with the attorneys who represented O’Neal in the Astrals case, who later came to represent the former NBA big man in the FTX suit.
After O’Neal’s FTX settlement was reached in late April, the judge in the case—which encompasses multiple lawsuits that were filed in various jurisdictions that were consolidated into one sprawling lawsuit in Florida federal court—issued an order in early May that dismissed many of the claims against celebrity and athlete endorsers. But there remain a few key claims that are still being argued, including one under Florida state law that prohibits the selling of unregistered securities.
“Shaq got in right under the wire a few days before that order came out,” Moskowitz tells FOS. “We gave him a good deal because it was before the order came out. He basically refunded what he was paid.”
Other athletes, celebrities, and well-known entities ensnared in the case—which was originally filed in November 2022—include Brady, Curry, and Ortiz; Brady’s ex-wife, supermodel Gisele Bündchen; MLB star Shohei Ohtani; former NBA player Udonis Haslem; professional tennis player Naomi Osaka; comedian Larry David; and Major League Baseball. According to Moskowitz, their decision to fight the case in court could cost them billions.
“Other celebrities wouldn’t even sit down with us,” Moskowitz says.
An amended complaint of more than 500 pages from the FTX investors, filed May 28, argues that celebrity and athlete endorsers cannot hide from the allegations, and decries the argument that they were merely endorsing a product but didn’t know the risks.
“Many were explicitly warned about the legal risks but continued soliciting sales to the public for their own financial benefit,” the amended complaint says.
The amounts that some athletes and celebrities were paid for their roles promoting FTX were disclosed in separate bankruptcy litigation. The ways in which athletes and celebrities promoted FTX varied, including roles in television ads, posts on social media, and general encouragement during public appearances that FTX was a safe and reliable exchange.
In addition to the nearly $750,000 O’Neal was paid, Ortiz received almost $271,000 and Osaka netted more than $308,000. Truly big money was paid to Brady and Curry (they reportedly received $55 million and $35 million, respectively).
That’s a lot of money, but it pales in comparison to the total damages that could be coming if the case goes all the way to trial and the FTX investors win. According to the amended complaint, damages are expected to exceed “tens of billions of dollars.”
The downfall of FTX was sudden and dramatic. In the fall of 2022, the cryptocurrency exchange collapsed following revelations that its founder and CEO, Sam Bankman-Fried, had misused billions of dollars of customer funds. The scandal resulted in FTX filing for bankruptcy and Bankman-Fried being arrested and convicted on multiple counts of fraud and conspiracy. Last year, he was sentenced to 25 years in prison.
Representatives for O’Neal and Ohtani declined to comment. Attorneys for the other athletes and celebrities who remain as defendants did not immediately respond to requests for comment.
