Shaquille O’Neal Settles Lawsuit Linked to FTX
Shaquille O’Neal can breathe a bit easier now. The former basketball star has settled a class action lawsuit for $1.8 million related to his promotion of the now-defunct cryptocurrency exchange, FTX. This closure not only marks a significant moment for O’Neal but also highlights evolving court perspectives on celebrity endorsements in the unpredictable crypto landscape.
O’Neal joins a list of high-profile individuals involved in the FTX lawsuit, including football icon Tom Brady, his ex-wife Gisele Bündchen, NBA star Steph Curry, tennis champion Naomi Osaka, and comedian Larry David. Some claims against these celebrities have already been dismissed, with many arguing they were unaware of the associated risks.
However, O’Neal’s decision to resolve the matter stands out for various reasons. He was accused of promoting FTX to his followers and played a key role in several marketing initiatives. Reports suggest that FTX had even sponsored his music festival, Shaq’s Fun House, and paid him $750,000 for his endorsement.
According to the lawsuit, the plaintiffs are seeking collective compensation, alleging that FTX recruited influencers and celebrities to present the platform as a superior alternative to other cryptocurrency exchanges.
The initial settlement agreement was reached in November of the previous year, officially announced in May, and finalized with the court filing on June 9th in the U.S. District Court for the Southern District of Florida, as reported by plaintiffs’ attorney Adam Moskowitz. O’Neal is required to fulfill the payment within 30 days.
FTX, which filed for Chapter 11 bankruptcy on November 11, 2022, became notable for its celebrity endorsements. However, beneath the surface, the platform reportedly misused customer assets as collateral to secure loans for trading and investing from its associated company, Alameda Research. The fallout from FTX’s collapse led to lawsuits against founder Sam Bankman-Fried and other figures involved, including those who had supported the exchange.
This settlement is more than just a personal legal resolution for O’Neal; it serves as a cautionary tale for other celebrities who enthusiastically jumped into the crypto market without fully grasping or disclosing the risks involved.
“I don’t understand that,” O’Neal stated in a 2021 CNBC interview regarding cryptocurrency. “So, maybe I’ll leave it until I fully understand what it is,” he added, reflecting a degree of skepticism. Yet, he didn’t step away from endorsing FTX.
In the wake of FTX’s downfall, regulatory bodies like the Securities and Exchange Commission and the Federal Trade Commission have intensified scrutiny on celebrity endorsements in the realm of crypto. The SEC is emphasizing the importance of transparent communication and financial understanding, indicating that fame won’t necessarily protect endorsers.
The message for celebrities is unmistakable: if you promote a product, you might still be held accountable if it fails.
This isn’t O’Neal’s only crypto-related legal challenge. Last November, he was also ordered to pay $11 million to resolve another lawsuit pertaining to Astral, a failed NFT project co-founded with his son Miles O’Neal. The venture aimed to create a metaverse experience with NFTs but faced setbacks after the turmoil surrounding FTX, leading Shaquille to distance himself from the effort and avoid accountability to investors.
With a total of $12.8 million settled in crypto-related lawsuits, O’Neal may reconsider attaching his name to future cryptocurrency ventures.
