April 19, 2024
FTX Sponsorship Controversy: Celebrities Navigate Legal Challenges
Policy & Regulation

FTX Sponsorship Controversy: Celebrities Navigate Legal Challenges

Three famous people have paid legal claims brought against them in connection with sponsorship agreements made with the defunct cryptocurrency exchange FTX before its demise last year.

A lawsuit accusing Jacksonville Jaguars quarterback Trevor Lawrence of deceiving FTX investors was reportedly settled for an unknown price. Tom Nash and Kevin Paffrath of the YouTube channel agreed to settlements as well, but the details were kept quiet.

Lawrence has a sponsorship agreement in place with FTX subsidiary Blockfolio as of 2021 before FTX went under. A document submitted on August 31 to the U.S. Bankruptcy Court states that Lawrence received $205,555.35 from the business.

Sponsorships with Lawrence and other celebrities at the time, according to FTX’s then-COO Sina Nader, helped ensure that cryptocurrency taboos were “officially shattered.”

Lawrence stated at the time of the Blockfolio transaction, “When it comes to my crypto portfolio, I wanted a long-term partner in the space that I could trust.

According to a class-action lawsuit brought by the Moskowitz Law Firm in March against Nash and other influencers, who is a well-known YouTuber with 289,000 subscribers, FTX also compensated him for an endorsement.

The complaint claims that once FTX failed, Nash and other influencers purportedly deleted all content praising the organization or its discredited founder, Sam Bankman-Fried, from their channels.

Australia-born Nash originally did not reply to the lawsuit, which prompted Moskowitz to ask a federal judge to permit them to serve the lawsuit via Twitter.

On November 17, 2022, Paffrath, another influencer with 1.88 million subscribers to his ‘Meet Kevin’ YouTube channel, admitted in a video that he had once been sponsored by FTX, calling it a “scar” that he regretted.

One day after being named in Moskowitz’s class-action complaint, Paffrath reiterated his accusations of fraud against SBF in a second video on March 16. Suggestions that influencers played a role in the losses caused by FTX’s scam, he said, were “ludicrous.”

These three are part of a larger group of famous people that FTX tried to nurture before it folded. Former NFL quarterback Tom Brady, his ex-wife Gisele Bundchen, former NBA player Shaquille O’Neill, and tennis player Naomi Osaka are among those who are currently facing legal action for their involvement in the trade.

The announcement of these settlements comes after FTX experienced a cyberattack that temporarily forced the closure of an online site used by former customers to make compensation claims. As part of the bankruptcy process, FTX was permitted by a federal judge to start selling the $3.4 billion in Solana, Ethereum, Bitcoin, and other assets it owned.

Image: Freepik

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