The settlement has been officially reached in a high-profile class-action lawsuit against FTX promoters.
Trevor Lawrence, a quarterback at the National Football League (NFL), along with YouTube personalities Kevin Paffrath and Tom Nash, have reached a settlement in a lawsuit alleging a lack of transparency in their promotional activities for bankrupt crypto exchange FTX.
The trio is the first among several celebrities and influencers to arrive at a settlement in this class-action suit. While the details of the agreement have not been made public, a report by Bloomberg on September 16th confirmed the settlement.
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Initially filed on March 15th, the lawsuit accused various public figures, including Shaquille O’Neal, Tom Brady, Naomi Osaka, Gisele Bündchen, Kevin O’Leary, and David Ortiz, of inadequately disclosing the financial incentives behind their promotions for FTX. The suit also named Creators Agency, the talent management company that coordinated the FTX promotions.
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.
Paffrath and Nash are part of a larger group of eight YouTube content creators implicated in the lawsuit for not sufficiently disclosing their financial ties to FTX. The other six YouTubers include Graham Stephan, Andrei Jikh, Brian Jung, Erika Kullberg, Jaspreet Singh and Jeremy Lefebvre.
In another turn of events, FTX is contemplating ways to recover the significant sums it previously paid to celebrities for promotional activities. According to court documents disclosed on September 11th, Trevor Lawrence received $205,555, Shaquille O’Neal received around $750,000, and Kevin O’Leary led the pack with a hefty sum of $2,348,338.
The settlement between Lawrence, Paffrath, and Nash marks a significant milestone in this ongoing class-action suit. While the exact terms remain undisclosed, the case continues to unfold, with other high-profile celebrities and influencers yet to settle. Given the public’s growing interest in cryptocurrency, this lawsuit serves as a cautionary tale about the importance of full disclosure in financial promotions.