FTX garnered significant attention through celebrity endorsements, including naming rights to the Miami Heat’s arena and a Super Bowl commercial featuring Larry David. Lawyers representing the plaintiffs in the $1 billion case against endorsers told Bloomberg that they are “engaged in ongoing confidential, settlement discussions” with other defendants, and there is a “likelihood that other FTX settlements will be reached.”
The lawsuit alleges that FTX’s celebrity endorsements contributed to the platform’s rise but asserts that the endorsers failed to disclose details of their deals and compensation to investors. At the time of filing, the lawsuit stated:
“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, payments and compensation, nor conduct adequate (if any) due diligence.”
Lawrence, the first overall NFL draft pick in 2021, signed an endorsement deal with FTX, receiving a $500,000 payment in cryptocurrency. Kevin Paffrath, known as a “landlord influencer,” promoted FTX on his YouTube channel, “Meet Kevin,” for which he was allegedly paid $2,500 for each mention of the platform.
Lawyers for the endorsers argue that the advertisements didn’t encourage users to actually deposit money into FTX accounts. Moreover, the lawyers maintain that the endorsers had no hand in the alleged “FTX’s misappropriation and mismanagement.”
After FTX collapsed in November 2022, Paffrath and Nash removed their FTX endorsements from their YouTube channels and issued apologies.
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