FTX Seeks to Recover Payments Made to Celebrity Endorsers
The now bankrupt crypto exchange FTX, which plans to resume operations in the future, is looking to reclaim some of the money it paid to professional athletes and teams who endorsed the platform.
According to Bloomberg, some of the notable names involved include Shaquille O’Neal and Naomi Osaka, although Tom Brady is not mentioned in the report.
FTX’s Rise and Fall
During its peak in 2021, FTX struck major deals to acquire naming rights for arenas and enlisted the support of various celebrities and professional athletes. However, the collapse of FTX in late 2022 not only affected the company and its employees, but also the celebrities associated with it, some of whom were served with class action lawsuits.
FTX’s Strategy to Recover Funds
Under the leadership of CEO John J. Ray III, FTX’s new executives have implemented tactics to recover some of the funds owed to creditors. Meanwhile, the founder of FTX, SBF, who is believed to be responsible for the collapse, awaits trial.
FTX Group has enlisted financial advisors to review the possibility of recovering payments made to O’Neal, Osaka, and others. The exchange described these payments as “prepayments related to advertising or sponsorship deals” in court documents.
“The crypto platform disclosed roughly $4.9 million disbursed to MLB, which required umpires to wear FTX patches, and at least $12.2 million related to partnership agreements with the Mercedes-AMG Petronas Formula 1 racing team. The platform also disclosed $3.4 million in payments to the NBA’s Golden State Warriors and nearly $242,000 to Stephen Curry’s business, SC30 Inc.” – according to the report.
Hot Take
FTX’s attempt to recover payments made to celebrity endorsers reflects the desperate measures taken by the exchange to address its financial obligations. It remains to be seen whether FTX will be successful in reclaiming these funds, but the move highlights the consequences of the exchange’s downfall on both the company and its high-profile partners.
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