- FTX advisors are working overtime to repay debtors and users.
- In a court filing, the exchange is going after celebrity endorsements, seeking a potential refund.
- While it is uncertain if FTX will succeed in its hunt, the exchange has historically spent a hefty fund on endorsements.
FTX’s spectacular downfall has become an alarming beacon of caution and intrigue, leaving behind unresolved financial chaos.
With the SEC breathing down the exchange’s neck and its once-heralded star boy behind bars, advisors are working overtime to collect loose change as they eye a comeback. Their latest target? Celebrity endorsements and sponsorship deals.
FTX Advisors’ Quest for Funds
The latest court filing from FTX reveals that its group advisors are probing if they can claw back the millions of dollars paid in celebrity endorsements and sponsorship deals before the exchange caught fire in November 2022.
Sponsored
The now-defunct firm is targeting the bags they paid numerous A-list athletes and sports teams to promote FTX, including Shaquille O’Neal, tennis star Naomi Osaka, and the Mercedes Racing Team.
While it is uncertain whether FTX will succeed in its hunt, the exchange has historically spent a hefty fund on endorsements akin to its political lobbying efforts. Sam Bankman-Fried, the company’s former CEO, elevated his empire’s status by using the popularity of celebrity athletes and teams from the NBA, Major League Baseball, and Formula 1.
In the court documents, FTX reasons that many of its endorsement transfers were ‘prepayments’ and warns that the financial information may not be completely accurate because the company lacked trustworthy books and records.
Sponsored
FTX further argued that its recovery of transfers could be possible because athletes, teams, and parties withdrew or offset their deposits before the exchange filed for bankruptcy. Considering the long list of companies and parties associated with FTX, advisors are looking at a potential payday.
Who Is in Bed with FTX?
Although FTX has cautioned that much of its information is inaccurate, it notes that the deposits it ultimately recovers could be substantially large.
Here’s a brief list of FTX prepayments the exchange is eyeing and believes could be undone.
- $5 million MLB deal for FTX logo on umpire attire.
- $12 million partnership with Formula-1 team Mercedes-AMG Petronas.
- $3 million NBA’s Golden State Warriors-FTX endorsement.
- $1.2 million NBA’s Washington Wizards sponsorship deal.
- $500,000 Miami Heat entertainment partnership.
- $240,000 payment to NBA star Stephen Curry.
- $4 million to a company linked with Shaquille O’Neal.
- $3.2 million to tennis star Naomi Osaka.
- Over $1 million on other athlete endorsements.
While the parties involved have yet to respond to FTX’s request, many celebrity athletes have already distanced themselves from the defunct exchange and claimed they’ve done nothing wrong.
On the Flipside
- Former co-CEO of Bahama-based affiliate FTX Digital Markets, Ryan Salame, pleaded guilty to multiple counts of criminal charges, forfeiting over $1.5 billion to the US Government.
- FTX proposed establishing a new offshore company that allows its claimants to hold equity securities, tokens, or other interests.
- Cardano founder Charles Hoskinson said that the Democratic party, which has notably received huge donations from FTX’s disgraced founder Sam Bankman-Fried, is trying to clear its name after the fiasco.
Why This Matters
Users and debtors have yet to receive reimbursements from FTX. The advisors’ quest to recover funds could alleviate tensions; however, it depends on how the opposing party responds to their requests.
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