Shaquille O’Neal to pay US$1.8 million to settle FTX class action lawsuit

Shaquille O'Neal speaks during a press conference on Feb. 13, 2024, in Orlando, Fla. (AP Photo/Kevin Kolczynski, File)

Former NBA player Shaquille O’Neal will pay US$1.8 million to settle a class action lawsuit related to the demise of cryptocurrency exchange FTX.

O’Neal, and other celebrities like Tom Brady and Stephen Curry, were named in the lawsuit in 2022. They had been accused of touting FTX as a reputable and trustworthy investment option via paid endorsements. The proposed settlement only pertains to O’Neal.

Three years ago FTX was the third-largest cryptocurrency exchange, but it ended up with billions of dollars worth of losses and had to seek bankruptcy protection. The Bahamas-based company and its founder, Sam Bankman-Fried, came under investigation by state and federal authorities for allegedly investing depositors funds in ventures without their approval.

Before its failure, FTX was known to use high-profile Hollywood and sports celebrities to promote its products. It had the naming rights to a Formula One racing team as well as a sports arena in Miami. Its commercials featured “Seinfeld” creator Larry David, as well as Brady, the former quarterback of the Tampa Bay Buccaneers and New England Patriots, basketball players O’Neal and Curry, and tennis star Naomi Osaka.

Bankman-Fried was sentenced to 25 years in prison in March 2024. A little more than a month after that, FTX said in a court filing that nearly all of its customers would receive the money back that they were owed.

While the proposed settlement with O’Neal had been agreed to in April, the payment amount and other terms were disclosed in a filing with the U.S. District Court, Southern District of Florida, Miami Division, earlier this week.

The settlement class includes anyone who deposited funds into FTX or bought its FTT token between May 2019 and late 2022.

The agreement, which still needs court approval, would provide O’Neal with a broad release from future claims and also includes a stipulation that he can’t seek reimbursement from the FTX estate.

The payment will be made within 30 days of the settlement being finalized, according to the filing.

Michelle Chapman, The Associated Press