FTX Cryptocurrency Exchange Case: Trevor Lawrence and Influencers Settle Lawsuit

<p>NFL
quarterback Trevor Lawrence, along with popular YouTube influencers Kevin
Paffrath and Tom Nash, have reached a settlement in a lawsuit related to their
endorsements of the now-defunct FTX cryptocurrency exchange. </p><p>High-Profile
Figures Face Similar Lawsuits</p><p>According
to Bloomberg's report on September 16, the terms of the settlement have not
been disclosed. This development marks the first resolution among more than a
dozen celebrities and firms accused of assisting Sam Bankman-Fried, the Founder of FTX, in
alleged investor deception. He is set to face a criminal trial in Manhattan
next month.</p><p>Other
high-profile individuals, including Tom Brady, Gisele Bundchen, Steph Curry,
Shaquille O’Neal, and Larry David, who had endorsed <a href="https://www.financemagnates.com/tag/ftx/">FTX</a>, are also facing similar
lawsuits. These class-action suits have been consolidated in a federal court in
Miami, along with complaints against venture capital and private equity firms
that invested in FTX, such as Sequoia Capital and Thoma Bravo.</p><p>FTX
garnered significant attention through celebrity endorsements, including
securing naming rights to the Miami Heat’s arena and a Super Bowl commercial
featuring Larry David. </p><p>Lawyers
representing the plaintiffs in the $1 billion case against endorsers disclosed
to Bloomberg that they are "engaged in ongoing confidential <a href="https://www.financemagnates.com/terms/s/settlement/">settlement</a>
discussions" with other defendants, suggesting a likelihood of more
settlements in the FTX case.</p><p>The
lawsuit alleges that the rise of FTX was significantly influenced by celebrity
endorsements but asserts that these endorsers failed to disclose details of
their deals and compensation to investors.</p><p>The Initial
Lawsuit Alleges Lack of Disclosure in Celebrity Endorsement Deals</p><p>When
the lawsuit was initially lodged, it asserted: “Though FTX paid Defendants
handsomely to push its brand and encourage their followers to invest,
Defendants did not disclose the nature and scope of their sponsorships and/or
endorsement deals, <a href="https://www.financemagnates.com/terms/p/payments/">payments</a> and compensation, nor conduct adequate (if any) due
diligence.”</p><p>Trevor
Lawrence, the first overall NFL draft pick in 2021, signed an endorsement deal
with FTX, receiving a $500,000 payment in <a href="https://www.financemagnates.com/tag/cryptocurrency/">cryptocurrency</a>. Kevin Paffrath, known as a
"landlord influencer," promoted FTX on his YouTube channel,
"Meet Kevin," for which he allegedly received $2,500 for each mention
of the platform.</p><p>Lawyers
representing the endorsers argue that the advertisements did not encourage
users to deposit money into FTX accounts. They also maintain that the endorsers
had no involvement in the alleged "FTX’s misappropriation and
mismanagement."</p><p>After
<a href="https://www.financemagnates.com/cryptocurrency/the-ftx-full-story-all-you-need-to-know/">FTX's collapse in November 2022</a>, Paffrath and Nash removed
their FTX endorsements from their YouTube channels and issued apologies.</p><p>The
resolution of this lawsuit involving Trevor Lawrence, Kevin Paffrath, and Tom
Nash is a significant development in the ongoing legal battle surrounding FTX
and its celebrity endorsements. As other high-profile cases continue, the
cryptocurrency industry is under an increasing amount of scrutiny regarding endorsements and the responsibility of endorsers in the crypto space.</p><p>FTX
Granted Permission to Liquidate Crypto Holdingsto Settle Debt</p><p>Last
week, <a href="https://www.financemagnates.com">Finance Magnates</a> reported that the <a href="https://www.financemagnates.com/cryptocurrency/news/ftx-granted-permission-to-sell-34b-in-crypto-holdings-by-us-court/">U.S. Bankruptcy Court for the
District of Delaware has authorized FTX</a> to liquidate, invest, and
hedge its crypto assets, valued at over $3.4 billion, in order to settle
outstanding debts. </p><p>This
decision follows FTX's request to engage in the sale of digital assets,
emphasizing the benefits of hedging and generating returns for creditors.</p><p>Judge
John Dorsey presided over the court hearing, approving the motion and
overruling objections from two opposing parties. To address concerns raised by
the U.S. Trustee, FTX amended its proposal, opting not to issue advance public
notices of transactions to avoid market impact. </p><p>They
will privately inform the U.S. Trustee and creditors' committees, ensuring
transparency in the process. FTX aims to settle opponents as the proposal
undergoes consideration by Judge John Dorsey in a Delaware courtroom.</p>

This article was written by Tareq Sikder at www.financemagnates.com.