Former NBA star Shaquille O’Neal has agreed to pay $1.8 million to resolve a class action lawsuit over his role in promoting the now-bankrupt cryptocurrency exchange FTX.
The proposed agreement, which still awaits final approval from the court, would shield O’Neal from future claims in the matter and prohibit him from seeking reimbursement from the FTX estate, according to court documents filed this week in the U.S. District Court, Southern District of Florida, Miami Division.
O’Neal was among a roster of high-profile celebrities—including Tom Brady and Stephen Curry—who were named as defendants in a 2022 lawsuit. The suit accused them of endorsing FTX as a reliable investment opportunity through paid advertisements. However, the settlement announced this week applies solely to O’Neal, who is expected to pay the agreed amount within 30 days of the settlement’s finalization.
The class action covers anyone who deposited funds or purchased FTX’s FTT token from May 2019 until late 2022, a period during which FTX was widely regarded as one of the world’s leading cryptocurrency exchanges.
FTX’s downfall sent shockwaves through the digital asset industry and brought intense scrutiny to the use of celebrity endorsements in financial products. The Bahamas-based exchange, under founder Sam Bankman-Fried, had aggressively marketed itself through sponsorships and star-studded commercials, featuring not only O’Neal but also Larry David, Tom Brady, Stephen Curry, and Naomi Osaka, among others.
Bankman-Fried was ultimately convicted of fraud and sentenced to 25 years in prison in March 2024 for his role in the company’s collapse. Shortly after his sentencing, FTX stated in a court filing that nearly all customers would be repaid the funds they were owed.
The scale of the disaster became clear when John Ray, who succeeded Bankman-Fried as FTX’s CEO, described the company’s operations as “unprecedented” in their dysfunction, according to a sworn declaration filed with the U.S. Bankruptcy Court for the District of Delaware obtained by The Epoch Times.
“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” Ray wrote in the declaration. Ray, who previously oversaw Enron’s bankruptcy, cited compromised systems, poor regulatory oversight, and a concentration of control among a small, inexperienced group as key factors in FTX’s collapse.
The company’s rapid unraveling began in early November 2022, following reports that FTX’s affiliated trading firm, Alameda Research, held a significant portion of its assets in FTT, FTX’s own token.
This revelation triggered a liquidity crisis as customers rushed to withdraw funds, ultimately leading to FTX’s bankruptcy filing and Bankman-Fried’s resignation.
FTX’s failure has prompted calls from lawmakers and regulators for stricter oversight of the cryptocurrency sector.