Shaquille O’Neal settles lawsuit over FTX endorsements amid ongoing bankruptcy drama

NBA Champion Shaquille O’Neal has reached a confidential settlement with a group of investors who sued him over his role in promoting the now-defunct crypto exchange FTX.

A court filing submitted on April 23 revealed that both parties have reached a proposed resolution and will now seek court approval to move forward.

The agreement, signed on April 1, remains confidential until the plaintiffs formally request preliminary approval.

O’Neal was one of several celebrities sued for endorsing FTX before it declared bankruptcy in late 2022. He appeared in several of the company’s promotional materials, including high-profile advertisements encouraging people to sign up on the now-defunct crypto trading platform.

Although the Basketball Hall of Famer later described himself as only a “paid spokesperson,” his public role made him a target when the platform went under. After FTX’s collapse, investors pointed to these endorsements as contributing to their financial losses.

Meanwhile, this isn’t O’Neal’s first legal entanglement in the digital asset space.

Last year, he resolved another class-action suit tied to the NFT project on Solana, Astrals. That case ended with an $11 million settlement, addressing claims that the NFTs were misrepresented and sold as unregistered securities.

FTX bankruptcy

The timing of O’Neal’s latest settlement aligns with new developments in the FTX bankruptcy process.

The defunct exchange is preparing for another round of creditor payments, scheduled to begin in May. This follows an earlier round in which $1.2 billion was distributed to claimants with balances under $50,000.

While the repayment processes have offered some relief to affected investors, it has also exposed them to fresh risks.

Sunil Kavuri, a vocal FTX creditor advocate, recently warned about phishing emails targeting the failed exchange’s creditors.

According to Kavuri, scammers are exploiting leaked data to target users with fraudulent messages. He urged recipients not to click on unknown links and to verify all communication through official FTX channels.