Investors Weigh Dropping Lawsuit Against FTX’s SBF in Exchange for Collaboration

• The settlement requires Bankman-Fried’s cooperation, including providing extensive information about FTX-related entities and his investments in Anthropic.
• The ongoing civil lawsuit in the Southern District of Florida involves multiple FTX promoters and insiders, with some defendants, including celebrities like Tom Brady and Gisele Bundchen, seeking settlements.

FTX co-founder Sam Bankman-Fried is likely to see some relief as investors seek to drop claims against the disgraced founder. Last week on April 19, Bloomberg reported that under a proposed settlement, Bankman-Fried would be cooperating against celebrity promoters dubbed defendants in this $1.3 million civil lawsuit.

The defendants currently include the names of some of the key celebrities such as former NBA player Shaquille O’Neal, former NFL quarterback Tom Brady, and supermodel Gisele Bundchen. The plaintiffs have argued that these celebrities openly promoted FTX thereby dragging many players into it.

In order to collaborate, Bankman-Fried would need to furnish plaintiffs’ attorneys with comprehensive information regarding FTX-associated entities, including venture capital firms that have invested in the exchange, as well as the accountants and attorneys involved with the company’s operations.

Furthermore, he would need to provide nonprivileged documents detailing his investments in the AI company Anthropic, along with an affidavit confirming his negative net worth.

In return for Bankman-Fried’s cooperation, plaintiffs would agree to dismiss existing and potential future claims against him. Bloomberg reported that plaintiffs acknowledged the value of Bankman-Fried’s participation but acknowledged that the change in focus could introduce uncertainty regarding the outcome of their case. The decision on whether to approve the proposal rests with the judge. As reported by Crypto News Flash, the disgraced FTX founder has already appealed his 25-year jail sentence.

Some Past Developments In FTX Lawsuit

The ongoing case in the Southern District of Florida consolidates multiple civil lawsuits against various FTX promoters and insiders.

Previously, several defendants sought a settlement, including FTX insiders Gary Wang, Caroline Ellison, and Nishad Singh, former FTX lawyer Daniel Friedberg, various internet personalities, and NFL quarterback William Trevor Lawrence, as stated in a filing on March 27. The current status of this settlement proposal remains uncertain.

In April 2023, celebrity promoters, including Brady and Bundchen, filed a motion to dismiss claims. This action merged with the consolidated case, Garrison v. Bankman-Fried et al., by June 2023.

It’s important to note that all civil cases are separate from the notable criminal case against Bankman-Fried, which has concluded. Bankman-Fried was convicted on criminal charges in November 2023 and received a 24-year prison sentence in March.

In their latest effort to garner voter support and oversee the cryptocurrency sector, US Senators Elizabeth Warren and Charles E. Grassley have penned a formal letter to Rostin Behnam, the current chairman of the Commodity Futures Trading Commission (CFTC). Dated April 12, 2024, the letter requests Chairman Behnam to provide information regarding the CFTC’s communication with SBF before its recent multi-billion-dollar collapse reported Crypto News Flash.