Investors in the bankrupt crypto firm FTX run by Sam Bankman-Fried have agreed to drop their claims against him in exchange for his cooperation in lawsuits against other defendants, including celebrities Tom Brady, Gisele Bundchen, and Larry David. According to the settlement filed in Miami federal court, Bankman-Fried will be free of any civil liabilities now and in the future. As part of the proposed settlement, Bankman-Fried will hand over nonprivileged documents detailing his assets, investments, and information about other defendants in the lawsuits. The disgraced exchange collapsed in November 2022 after Bankman-Fried used user funds to cover a debt at sister company Alameda Research.
Bankman-Fried has agreed to provide FTX investors with information about the accountants, lawyers, and venture capital firms involved with the exchange. Celebrities like Tom Brady, Gisele Bundchen, and Larry David, along with other endorsers, are facing lawsuits accusing them of promoting the exchange’s unregistered securities and enticing investors into a Ponzi scheme. Bankman-Fried, along with his co-defendants and other FTX insiders, have settled with the investors and are cooperating by providing information to help in the lawsuits. Social media celebrities who promoted FTX have also settled and agreed to contribute to a common fund to fund the plaintiffs’ lawsuit.
More than a dozen venture capital firms are also facing litigation regarding their involvement with FTX. The settlements with promoters are valued at about $1.3 million, with the group of FTX investors being led by lawyer Adam Moskowitz. Bankman-Fried signed off on the settlement agreement while appealing his conviction and 25-year prison sentence. Last month, Bankman-Fried was sentenced to 25 years in prison after being found guilty on seven counts of fraud and conspiracy in what federal prosecutors have called one of the biggest financial frauds in US history.
Bankman-Fried’s ex-girlfriend Caroline Ellison, FTX co-founder Gary Wang, former company executive Nishad Singh, and FTX lawyer Dan Friedberg have all agreed to settle and are providing information to assist investors. The settlements include a common fund of $1.4 million to fund the plaintiffs’ lawsuit. The group of FTX investors is still in the process of finalizing the proposed settlement with Bankman-Fried and other defendants. The settlements with promoters, venture capital firms, and other defendants are part of a larger legal battle that has ensued since FTX’s collapse in November 2022.
The group of FTX investors is seeking compensation for their losses due to the collapse of the exchange. Bankman-Fried, along with his co-defendants and other FTX insiders, have agreed to cooperate and provide information to assist in the lawsuits. The settlements with celebrities, social media influencers, and venture capital firms are part of the effort to hold all parties involved accountable for their roles in the collapse of FTX. The lawsuits and settlements are ongoing, with approval from a judge needed for the proposed settlements. The legal battle surrounding FTX’s collapse continues as investors seek restitution for their losses.
