FTX is doing everything it can to reclaim as many funds as possible.
FTX, the cryptocurrency exchange that declared bankruptcy last November, is examining the possibility of recovering money it paid for celebrity endorsements and sports sponsorships.
FTX faces serious financial challenges, as revealed in a detailed court document dated August 31st. The filing lists well-known personalities and organizations that FTX financially backed as part of its marketing initiatives. However, apart from listing its financial investments, the report explicitly explores whether these payments could be undone under bankruptcy laws.
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The disclosed sums are substantial: a $750,000 payment to retired NBA player Shaquille O’Neal, $300,000 to tennis star Naomi Osaka, $270,000 to former baseball icon David Ortiz, and $200,000 to NFL quarterback Trevor Lawrence.
Payments to sports teams are also under scrutiny, including nearly $420,000 to the Golden State Warriors and more than $250,000 to the Miami Heat. However, the filing does caution that the amount eventually reclaimed "may vary materially from the amount reported."
FTX's legal challenges extend beyond its bankruptcy issues. Numerous celebrities named in the court document, including O’Neal, Osaka, and the Golden State Warriors, face class-action lawsuits filed by FTX users. These users allege that the celebrities contributed to promoting crypto exchange that sold unregistered securities.
In an aggressive legal strategy, FTX itself has launched a handful of lawsuits to recover its funds. In July, the crypto exchange filed suits against its co-founder Sam Bankman-Fried and other former executives, alleging misappropriation of over $1 billion.
As FTX battles to navigate the complexities of its bankruptcy case, the cryptocurrency exchange is leaving no stone unturned in efforts to reclaim as much capital as possible. By potentially rolling back payments made to high-profile endorsers and sports teams, FTX is exploring a rarely used but legally plausible avenue.
