Shaquille O’Neal Settles Lawsuit for $1.8 Million
Basketball icon Shaquille O’Neal can finally relax as he has reached an agreement to pay $1.8 million to resolve a class-action lawsuit tied to his involvement with the now-defunct cryptocurrency exchange FTX. This settlement not only closes a significant legal chapter for the former Los Angeles Lakers star but also signals a shift in how the legal system is addressing celebrity endorsements in the unpredictable realm of cryptocurrency. Once seen as a protective shield, celebrity status is increasingly being scrutinized in this volatile market.
Notable Figures Involved in the FTX Case
O’Neal is one of the first prominent figures to settle in connection with the high-profile FTX litigation, which includes other celebrities such as football star Tom Brady, his ex-spouse Gisele Bündchen, NBA star Steph Curry, tennis champion Naomi Osaka, and Larry David, the creator of Seinfeld. Some allegations against these individuals, who claimed ignorance of the associated risks, have already been dismissed. However, O’Neal’s choice to settle is particularly noteworthy, as he faced accusations of endorsing FTX to his followers and investors through various marketing initiatives. In exchange for his promotion, FTX reportedly sponsored his event, Shaq’s Fun House, with O’Neal receiving an estimated $750,000 for his endorsement efforts.
Details of the Settlement and Legal Proceedings
According to court documents, the plaintiffs sought class-action relief from O’Neal, accusing him of acting as a celebrity influencer who misrepresented FTX as a safe and credible alternative to other cryptocurrency platforms. An initial settlement was established last November, with details released in May, culminating in the final $1.8 million agreement filed on June 9 in the U.S. District Court for the Southern District of Florida by the plaintiffs’ attorney, Adam Moskowitz. O’Neal is required to make the payment within a month.
The Downfall of FTX and Its Implications
FTX, which declared bankruptcy on November 11, 2022, had rapidly ascended in the cryptocurrency sector, partly due to its celebrity endorsements. However, it was later revealed that the exchange was misusing customer funds as collateral to secure loans for its sister company, Alameda Research, which engaged in trading and investments. The collapse of both firms resulted in a torrent of lawsuits targeting founder Sam Bankman-Fried, his associates, and the celebrity endorsers.
A Cautionary Tale for Celebrities in Crypto
O’Neal’s settlement extends beyond his individual legal responsibility; it serves as a critical warning for other celebrities who profited from the cryptocurrency surge without fully grasping or disclosing the inherent risks. In a prior interview with CNBC, O’Neal expressed his lack of understanding regarding cryptocurrencies, stating, “From my experience, it is too good to be true.” Despite his reservations, he did not refrain from participating in the crypto space.
Increased Regulatory Scrutiny on Celebrity Endorsements
In the aftermath of FTX’s collapse, regulatory bodies like the Securities and Exchange Commission (SEC) and the Federal Trade Commission (FTC) have intensified their oversight of undisclosed cryptocurrency endorsements. The SEC is advocating for “fair disclosure” and promoting “financial literacy,” clarifying that celebrity status no longer provides immunity from accountability. The clear message to public figures is that if they endorse a product, they are now expected to take responsibility for its fallout.
O’Neal’s Ongoing Legal Challenges in Crypto
This settlement is not O’Neal’s only legal complication linked to cryptocurrency. Last November, he was ordered to pay $11 million to settle a separate lawsuit regarding Astrals, an unsuccessful non-fungible token (NFT) project he co-founded with his son, Myles O’Neal. NFTs are digital assets that can be owned, traded, or sold online. The project had promised an interactive metaverse experience featuring NFT avatars, but following the collapse of FTX, O’Neal reportedly distanced himself from it, leaving investors without recourse. With a total of $12.8 million in settlements related to cryptocurrency, O’Neal may reconsider his future endorsements in this space.
