FTX Paid Celeb Athletes Millions; Now Bankrupt, It Wants Its Money Back
FTX seeks to reverse payments made to Shaquille O’Neal, Naomi Osaka, Stephen Curry, and other celebrity athletes who promoted the crypto exchange before it filed for bankruptcy.
FTX’s collapse
Sam Bankman-Fried started FTX in 2019 as a digital currency exchange platform that lets people buy and trade cryptocurrency.
Customers began opening accounts on FTX to trade and buy cryptocurrency, and top venture capital investors began pouring into it. According to Tech Target, by January 2022, the company was worth $32 billion.
However, that ended in November 2022 when an accounting oversight was a significant fraud, and billions of dollars were lost to customers and investors.
Attempts to get its money back
FTX Group advisers have now scrutinized whether they can get back millions of dollars paid to several professional athletes and teams who promoted FTX.
In an over 190-page court filing, FTX’s financial advisers laid out a detailed list of high-profile figures and businesses it paid in its marketing efforts.
They aimed to see if they were covered by rules allowing bankrupt companies to reverse payments in certain circumstances.
How much did FTX pay?
FTX’s disclosures offer a glimpse into the payments made to celebrity athletes, teams and leagues for promotional purposes.
The list includes $750,000 made to former basketball pro Shaquille O’Neal, over $270,000 to retired baseball star David Ortiz, and tennis star Naomi Osaka received over $300,000.
FTX also disclosed at least $12.2 million related to partnership agreements with Formula 1 racing team Mercedes-AMG Petronas and $3.4 million in payments to the NBA’s Golden State Warriors. Over $240,000 went to Golden State Warriors’ star player Stephen Curry’s business, SC30 Inc.
The celebrity atheletes were also previously mentioned in a class action lawsuit for promoting the failed crypto exchange.
However, FTX warned that the figures may not be accurate. According to Bloomberg, the new FTX Chief Executive Officer John J. Ray III said when the company filed Chapter 11 – a form of bankruptcy – the company needed more trustworthy financial information.
It didn’t keep complete books and records.
Will FTX recover its payments?
We don’t know whether FTX advisers believe all the payments can be recovered or if any athletes or teams have already offered to return payments.
It’s also possible that athletes, teams or other parties either withdrew or offset deposits before FTX filed bankruptcy, the company said.
Lawyers representing Shaquille O’Neal, Steph Curry, Naomi Osaka, and the Golden State Warriors didn’t respond to Bloomberg’s requests for comment.
