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News

FTX Investors Are Now Giving Bankman-Fried a Chance To Reduce His Prison Sentence

April 20, 2024 - Around 2 mins mins to read

Key Points:

  • FTX investors consider dropping claims against co-founder Sam Bankman-Fried in a proposed settlement.
  • The settlement, if approved, hinges on Bankman-Fried’s cooperation against celebrity promoters accused in a $1.3 million civil lawsuit.
  • Bankman-Fried’s assistance could strengthen the case against FTX influencers and aid victim recovery.
Investors in FTX Derivatives Exchange are considering dropping claims against the company’s co-founder and former CEO, Sam Bankman-Fried (SBF), as part of a proposed settlement.
FTX Investors Are Now Giving Bankman-Fried a Chance To Reduce His Prison Sentence

FTX Investors Weigh Dropping Claims in Settlement Talks

This move comes amidst ongoing legal battles involving celebrity promoters accused of endorsing the exchange’s unregistered securities, allegedly leading FTX investors into a Ponzi scheme.

According to a Bloomberg report on April 19, the proposed settlement would see Bankman-Fried cooperating against celebrity promoters named in a $1.3 million civil lawsuit. Plaintiffs in the United States District Court for the Southern District of Florida, who sued FTX influencers in 2022, announced they had reached a settlement with Bankman-Fried.

FTX investors cited the expenses and prolonged legal proceedings, opting to leverage information from his criminal trial to strengthen their case against other defendants.

Implications for FTX Promoters and Sam Bankman-Fried

The civil case implicates celebrities such as Tom Brady, Shaquille O’Neal, and Gisele Bundchen, who were accused of promoting FTX and luring investors into the alleged Ponzi scheme.

The proposed settlement, subject to court approval, aims to resolve the lawsuit between SBF and crypto users seeking recourse for losses during FTX’s fall. It involves dropping all claims against Bankman-Fried if he assists in prosecuting FTX influencers and aids in victim recovery by providing valuable information from his criminal trial.

Bankman-Fried would need to release confidential information about celebrities’ involvement in boosting FTX before its collapse in 2022, including financial statements and sworn affidavits. The agreement also requires disclosure of venture capital firms that invested in FTX and details about accountants and lawyers working with the exchange.

If approved, this potential deal would absolve Bankman-Fried from civil liability, providing a significant reprieve for someone recently sentenced to 25 years in prison for his role in the FTX collapse.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

#Sam Bankman-Fried

FTX

FTX Investors

SBF

Shaquille O'Neal

Tom Brady

Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.