There’s a settlement in sight for Shaq FTX lawsuit, as filed in the US District Court for the Southern District of Florida on April 23. The basketball legend, who has agreed to settle with investors who claimed losses from the collapse of cryptocurrency exchange FTX, has still not agreed to pay the amounts due.  

Key-Takeaways:

• The Shaq FTX lawsuit was settled when O’Neal reached an undisclosed deal with investors. It is part of a bigger legal fight to get up to $21 billion in damages from FTX promoters.
• In addition to the ongoing case, O’Neal is facing another lawsuit involving his promotion of the Solana-based Astrals NFT project. The debates about celebrity cryptocurrency endorsements mirror an intensifying watch over celebrity endorsements in general.

The Long Road to Serving Papers in the FTX Lawsuit

The high-profile defendant in the Shaq FTX lawsuit wasn’t the only reason it attracted attention: lawyers found it almost impossible to serve O’Neal with the legal documents. Prosecuting attorneys said O’Neal was escaping from the lawsuit’ after failing multiple attempts to hand over court papers to him.

The Shaq FTX lawsuit saga was filled with creative legal teams trying to find the NBA legend for months.

For investors to start their first big case, Adam Moskowitz, one of the lawyers representing FTX investors in the Shaq FTX lawsuit, said: “In 30 years, I’ve never had to deal with this situation.” “We are not going away.” O’Neal was served at his home, at TNT studios where he works as an analyst, and even at his ex-wife’s house.

A particularly memorable occasion in the Shaq FTX lawsuit storybook has been when a process server tried to service the papers to O’Neal at his residence. In what he was driving, which was described as a ‘fast breaking SUV,’ the basketball star reportedly drove past them.

However, the Shaq FTX lawsuit didn’t stipulate that this was an official serving so the server made an attempt to throw the legal documents inside the vehicle.

O’Neal said that he was trying to demonstrate that he ‘drove past the strangers lurking outside his home,’ rather than tampering with the service of the lawsuit. 

According to his legal team’s court documents, while Mr. O’Neal has absented himself from the wards where the Plaintiffs made delayed attempts to make contact and drove by individuals who came to pursue Mr. O’Neal or to physically harass him, he has not avoided service.

In the Shaq FTX lawsuit, they asked the court to “quash service and dismiss the claims against him.”

Finally, the impasse in the Shaq FTX lawsuit was broken when a process server found the legal papers from O’Neal just before an NBA playoffs game between the Boston Celtics and Miami Heat. Moskowitz said the server filmed the interaction “to be sure that Shaq is not doing what he is trying to do in the FTX case, which is to say, there was no ambiguity.”

The process server was kicked out of the arena after the service of the Shaq FTX suit by Moskowitz and others, he said. It was the last try to deliver the suit to O’Neal, though that had not been easy and it took much time.

The Lawsuit Against Shaq Due to Promotion of FTX

In the Shaq FTX lawsuit, the focus was on endorsements O’Neal generated for the cryptocurrency exchange, including a commercial in which NBA great Stephen Curry is joined by a Shaq voiced over by O’Neal. On the same day of June 1, 2022, FTX introduced their connection with O’Neal, nicknamed “Shaqtoshi,” on his social media.

O’Neal has always stated that his role at FTX was limited to him being a paid spokesperson and that despite his promotional work, which brought the Shaq FTX lawsuit, he was not actually involved with the company. 

When asked about the situation that culminated in the Shaq FTX lawsuit, O’Neal told CNBC, “A lot of people think that I’m involved with the fact that I was a paid spokesperson in a commercial.”

The Shaq case was a part of a larger series of multidistrict litigation targeting many celebrities that promoted the exchange. It is a legal action brought up against people involved in the collapse of the cryptocurrency platform.

They have included other well known defendants such as footballer quarterback Tom Brady,  Gisele Bündchen (supermodel), billionaire investor Kevin O’Leary, NBA former player Udonis Haslem, baseball star David Ortiz and tennis champion Naomi Osaka. This claim is that these celebrities helped promote FTX in a manner that fooled investors.

More than $21 billion of damages have been sought by legal actions involving the FTX affair from insiders, advisers and promoters. That amount pales in comparison to the $9.2 billion the bankruptcy proceedings are providing.

To understand the Shaq FTX lawsuit context one has to first take in FTX’s meteoric rise and subsequent collapse. FTX was founded in 2019 by Sam Bankman-Fried and Gary Wang, and in just a few years it became the largest cryptocurrency exchange in the world.

In July 2021, FTX had amassed over a million users as an example of the crypto boom. At that time, the company had brought in an impressive $1.02 billion revenue to its name making it a dominant player in the market.

The Shaq lawsuit would turn out to be short lived however as the success preceding it. CoinDesk published an article in November 2022, revealing FTX’s trading firm Alameda Research had a very large amount of FTX’s own cryptocurrency token FTT.

And after that, FTX’s rival exchange Binance said it would liquidate Changpeng Zhao, CEO of rival exchange Binance, announcing that his company would liquidate FTT holdings. Investors became too sceptical about FTT and it melted in a great sell off.

As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4

— CZ 🔶 BNB (@cz_binance) November 6, 2022

In just three days, investors tried to sell their FTT tokens and $6bn in withdrawals were made. Then, the exchange went into great distress, leading to FTX suspending withdrawals for a so-called ‘liquidity crunch’ that symbolized the start of the exchange’s downfall.

Binance, for instance, offered to buy FTX but quickly ended that pursuit because it could not make up for that liquidity gap under the circumstances. In a statement, the two cited “alleged US agency investigations and mishandled customer funds.”

Shortly after, the once $32 billion valued company, FTX, filed for Chapter 11 bankruptcy. On charges of wire fraud, securities fraud and money laundering, Bankman-Fried allegedly faces the Shaq FTX lawsuit and other celebrity promoters in similar legal cases.

Multiple Legal Challenges That are Beyond the Shaq FTX Lawsuit

O’Neal’s name is now associated with more than one crypto lawsuit in recent times. The settlement with FTX investors comes less than a month after O’Neal paid $11 million in order to resolve a separate class action lawsuit involving his involvement with the Solana based Australs NFT project.

The Astrals NFT lawsuit was served to O’Neal while he was in Miami for an NBA game at the Kaseya Center (formerly the FTX Arena) back in May 2023. 

The other class action lawsuit alleges that O’Neal’s NFTs were made as unregistered securities. Some of the claims brought against him in that case will have to be defended in a Miami federal court judge said he would need to do in August 2024.

Astrals project incorporated 10 000 NFTs on the Solana blockchain, a metaverse (Astralworld), a DAO, with a governance token (Galaxy). The FTX lawsuit is only the latest of O’Neal’s often lamely broached cryptocurrency endorsement woes, showing that it all isn’t directly tied to the Shaq FTX lawsuit.

Conclusion

Terms of the Shaq FTX lawsuit were made public after investors sought court approval to allow investors to settle the FTX lawsuit with a confidential settlement. This case may pave the way for more standards regarding cryptocurrency promoters as cryptocurrency regulations become more prevalent.