A group of investors has reached a settlement in their civil case against FTX founder Sam Bankman-Fried, with an agreement for his cooperation in their case against celebrities who promoted the platform.
In documents filed on Friday, the investors requested a Miami court approve the settlement, citing Bankman-Fried’s valuable knowledge regarding other defendants, including celebrities like Shaquille O’Neal, Gisele Bündchen, Tom Brady, Kevin O’Leary, and others.
FTX Founder Sam Bankman-Fried Signed the Documents
Bankman-Fried, who was recently sentenced to 25 years in prison, signed the documents along with Adam Moskowitz, co-lead counsel for the class action lawsuit, as reported by Bloomberg.
“While Class Counsel is aware that Defendant is currently incarcerated and has substantial restrictions on what he is permitted to do, and when, under the circumstances, Defendant shall make his reasonable efforts to cooperate as follows,” according to the settlement documents.
The investors are seeking various documents and information from Bankman-Fried, including financial statements showing his assets, all non-privileged documents related to his investments in Anthropic PBC, and non-privileged information regarding firms like law firm Sullivan & Cromwell and the celebrities involved.
FTX Implosion
FTX, which spent millions on marketing and advertising and signed deals with celebrities and organizations like the MLB and the NBA’s Miami Heat franchises, later collapsed in 2022, resulting in investors losing $8 billion.
Bankman-Fried was found guilty in November by a New York jury on all seven criminal counts of defrauding FTX customers, lenders, and investors. He received a 25-year prison sentence during a hearing last month.
The settlement with Bankman-Fried represents a significant development in the legal battle surrounding FTX’s collapse. By agreeing to cooperate with the investors, Bankman-Fried may provide crucial information that could aid in pursuing legal action against other individuals involved in promoting the platform.
Interestingly, the prosecutors sought a 50-year sentence for the former FTX chief executive, claiming that the term aligns with the severity of his crimes.
Billions Lost
Despite his incarceration, Bankman-Fried’s cooperation could shed light on the events leading to FTX’s downfall and potentially assist in recovering losses incurred by investors.
As the case progresses, the involvement of celebrities and other high-profile figures adds further intrigue to the legal proceedings.
Recently, Deltec Bank and Trust Ltd., a Bahamas-based financial institution, was accused of extending substantial lines of credit and facilitation of questionable transfers, raising concerns about its involvement in the collapse of the FTX empire. The bank is believed to have extended a $2 billion line of credit to Alameda Research, the sister trading firm of FTX, which was accused of misusing client funds.
On the other hand, lawyers from Sullivan & Cromwell, the firm representing FTX, recently confirmed that the exchange has no plans to restart operations and is focused on repaying the creditors in full.
Billions were lost in the collapse of the exchange, and the lawyers stated in court filings that “after an exhaustive effort, no investor is ready to commit the needed capital to a restart of the offshore exchange, nor has a buyer emerged for that exchange as a going concern.”
