The co-lead counsel of the bankrupt cryptocurrency exchange FTX is making progress in their attempts to claw back funds donated to celebrities, influencers, professional athletes, and teams by the Sam Bankman-Fried (SBF) led management before the firm’s implosion in November.
According to several filings, FTX’s co-lead counsel has voluntarily dismissed a case against crypto influencer Ben Armstrong, popularly known as BitBoy, and reached settlements with three high-profile endorsers of the failed exchange.
BitBoy’s Dismissal and Proposed Settlements
Following FTX’s collapse, the firm’s investors commenced litigation against several celebrities seeking a refund for payments they received from SBF to tout the crypto platform. The sports figures and TV stars were accused of promoting a fraudulent scheme through FTX to exploit retail investors with minimal knowledge about the crypto space.
Prominent figures like former and current professional basketball players Shaquille O’Neal and Steph Curry, professional tennis player Naomi Osaka, National Football League (NFL) superstar Tom Brady, Major League Baseball and the National Basketball Association’s Miami Heat and Golden State Warriors franchises were all mentioned as defendants in the case. YouTube influencers BitBoy, Kevin Paffrath, and Tom Nash were not left out either.
Last weekend, FTX’s co-lead counsel dismissed Armstrong from the suit because he had not filed an answer to the allegations brought against him or sought summary judgment.
The counsel also disclosed that they had reached proposed agreements with NFL’s Jacksonville Jaguars quarterback Trevor Lawrence, Paffrath, and Nash to settle the claims that they helped dupe FTX investors.
Settlement Discussions With More Defendants
The attorney revealed they were in settlement discussions with more FTX defendants who agreed to engage in mediation once they were dismissed from the lawsuit.
“Co-Lead Counsel are also in settlement discussions with additional FTX Defendants, who have advised that, following a ruling by the Court on the soon-to-be-filed Motions to Dismiss, they will be in a better position to attend mediation, and dates have already been reserved with Judge Michael Hanzman (ret.) to mediate those claims in October and November.”
Due to the likelihood that these settlements will be reached, the counsel has asked the court to conduct one hearing in consideration of the proposed settlements.