In a recent market shake-up, a cadre of investors and customers linked to the cryptocurrency exchange FTX have agreed to abandon their legal claims against co-founder Sam Bankman-Fried. This unexpected agreement comes at a surprising juncture in the ongoing legal battle swirling around the collapse of the controversial crypto exchange firm.
According to the tentative deal, which now lies in the hands of a federal judge in Miami awaiting approval, the release of Bankman-Fried from his civil responsibilities may be imminent. This development comes only a few weeks after the embattled co-founder was hit with a staggering 25-year prison sentence, a consequence of fraud charges stemming from allegations of pilfering billions of dollars from the coffers of FTX.
If given the green light, the settlement will effectively extinguish all present and future claims against Bankman-Fried lodged by plaintiffs in the multidistrict litigation. This notable move includes former high-ranking FTX associates, such as the ex-executives Gary Wang, Caroline Ellison, and Nishad Singh. Notably, these individuals have already conceded to the settlement and begun presenting information to boost the plaintiff’s case, as detailed in the court filing.
This startling resolution, however, still leaves well-known celebrities, sports figures, and social media influencers, who endorsed FTX heavily, in the crosshairs as the remaining defendants.
Bankman-Fried, under the umbrella of this settlement agreement, has pledged his assistance to the plaintiff’s legal team as they set their sights on the remaining FTX promoters. His aid will involve providing complete access to any non-privileged documents tied to his assets and his investment in the artificial intelligence start-up Anthropic.
Additionally, Bankman-Fried is expected to provide an affidavit verifying his negative net worth and disclosing related documents about the other defendants embroiled in this sprawling civil lawsuit.
A diverse roster of powerful figures, including sneaker-loving National Basketball Association stalwart Shaquille O’Neal, footballer Tom Brady, and supermodel Gisele Bundchen, are among the defendants accused of promoting unregistered securities and enticing investors into a harmful Ponzi scheme. Bankman-Fried’s cooperation is expected to yield more information about these individuals, as well as venture capital firms that sunk funds into FTX and the attorneys and accountants who provided services to the exchange.
If the plaintiffs manage to pull off a win in this convoluted case, they could be awarded significant damages. Court filings suggest that settlements from the promoters involved in this agreement might amass an estimated $1.3 million.
Mark Botnick, the spokesperson for Bankman-Fried, said that his client is striving to amend his previous missteps. Banksman-Fried has spent his time since the collapse of FTX singularly focused on the return of the exchange’s assets to customers. The goal is that customers are made whole at current prices, and Bankman-Fried is committed to working with Adam Moskowitz and his team, the plaintiffs’ representatives, to realize this objective.
The lawyers for the plaintiffs have articulated their anticipation of litigation risks and the unpredictability inherent in chasing after Bankman-Fried. Given these considerations, they concluded that his cooperation would be highly valuable in the ensuing proceedings.
Found guilty in a closely watched trial last year and sentenced in late March, Bankman-Fried now resides at the Metropolitan Detention Center in Brooklyn, New York. However, he will be transferred to the prison where he will serve his term. He is diving headfirst into an appeal against both his sentence and conviction. Amidst all the turmoil, cryptocurrency FTT has shown a promising trend, with the price climbing steadily in recent days.
