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FTX Bankruptcy Saga: Co-Lead Counsel Advances in Recovering Celebrity-Endorsed Funds

In the ongoing legal drama surrounding the bankrupt cryptocurrency exchange FTX, the co-lead counsel is making headway in their quest to recover funds paid to celebrities and influencers by the exchange’s management, led by Sam Bankman-Fried (SBF). These payments occurred before the exchange’s collapse in November, and several high-profile individuals were caught in the legal crosshairs.

FTX’s co-lead counsel recently dismissed a case against crypto influencer Ben Armstrong, commonly known as BitBoy. Additionally, settlements have been reached with three other notable endorsers of the ill-fated platform. The dismissal of Armstrong is particularly noteworthy because he did not respond to the allegations or seek summary judgment, thus resulting in his exclusion from the case.

Moreover, the co-lead counsel disclosed they’ve reached proposed settlement agreements with NFL’s Jacksonville Jaguars quarterback Trevor Lawrence and YouTube influencers Kevin Paffrath and Tom Nash. These settlements aim to resolve the allegations that they played a part in deceiving FTX investors. Consequently, this could serve as a blueprint for settling other similar cases.

However, the list of defendants is not short of big names. Those initially implicated are basketball legends Shaquille O’Neal and Steph Curry, tennis star Naomi Osaka, NFL icon Tom Brady, and major sports franchises like MLB and the NBA’s Miami Heat and Golden State Warriors.

Besides Armstrong, the co-lead counsel has engaged in settlement discussions with other defendants, who agreed to mediate once dismissed from the ongoing lawsuit. According to the counsel, these parties await the court’s decision on the soon-to-be-filed Motions to Dismiss before entering mediation. Dates for these mediation sessions presided over by Judge Michael Hanzman (ret.), have already been set for October and November.

In summary, the co-lead counsel’s progress in recouping funds and reaching settlements may offer a semblance of justice for the retail investors who lost money in the FTX fiasco. Hence, all eyes are on the court’s forthcoming decisions, which could set crucial legal precedents for celebrity endorsements in the volatile crypto market.


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