Shaquille O’Neal has been forced to pay $1.8 million to settle a class-action lawsuit over his promotion of the collapsed cryptocurrency exchange FTX, despite his claims that he was “just a paid spokesperson.”
Key Takeaways
- Shaquille O’Neal agreed to pay $1.8 million to settle claims he misled investors by promoting FTX before its catastrophic collapse
- O’Neal’s settlement exceeds the $750,000 he reportedly earned for starring in FTX commercials, highlighting the steep price of celebrity endorsements gone wrong
- The settlement covers FTX users who deposited funds or purchased FTT tokens between May 2019 and late 2022
- Other celebrities including Tom Brady, Stephen Curry, and Larry David also face legal consequences for their FTX endorsements
- The case establishes a concerning precedent for celebrities who promote financial products without proper due diligence
Basketball Legend Pays Price for Crypto Promotion
NBA Hall of Famer Shaquille O’Neal has agreed to pay $1.8 million to settle a class-action lawsuit related to his promotion of the now-bankrupt cryptocurrency exchange FTX. The settlement, disclosed in mid-June 2025, makes O’Neal one of the highest-paying individual defendants among the celebrity endorsers sued after FTX’s spectacular collapse in 2022. Court documents reveal that O’Neal will pay more than double the $750,000 he reportedly received for appearing in FTX commercials, demonstrating the severe financial consequences for celebrities who lend their names to questionable financial ventures.
The settlement covers a class of FTX users who deposited funds or purchased the company’s FTT token between May 2019 and November 2022, when the exchange imploded amid allegations of fraud and misappropriation of customer funds. While agreeing to the substantial payment, O’Neal admitted no wrongdoing as part of the settlement terms. The agreement stipulates that the basketball legend must make the payment within 30 days of court approval, which remains pending as of June 2025.
Celebrity Endorsement Disaster
O’Neal joins a growing list of high-profile celebrities who have faced legal consequences for their roles in promoting FTX before its downfall. NFL star Tom Brady, NBA sharpshooter Stephen Curry, and comedian Larry David were among the famous faces who appeared in FTX’s aggressive marketing campaigns, portraying the crypto exchange as a trustworthy platform for everyday Americans. The lawsuit alleged these celebrities failed to disclose they were paid promoters and misled consumers about the safety and reliability of the platform.
“While Shaquille O’Neal has claimed he was ‘just a paid spokesperson,’ the settlement underscores the legal risks for celebrities who promote high-risk investments without proper disclosures or due diligence,” said Marcus Thornton, a securities attorney commenting on the case. “This should serve as a warning to influencers that their endorsements carry real legal weight, especially in the financial sector.”
Jacksonville Jaguars quarterback Trevor Lawrence previously settled similar claims for $1.3 million, establishing a pattern of substantial out-of-court resolutions as celebrities seek to distance themselves from the FTX debacle. These settlements highlight the growing scrutiny of celebrity-backed financial promotions and could influence future regulations governing influencer marketing in the investment space.
FTX Collapse: A Cautionary Tale
The settlements stem from the catastrophic failure of FTX, once valued at $32 billion and ranked as the third-largest cryptocurrency exchange globally. The company’s downfall began in November 2022 when reports emerged that founder Sam Bankman-Fried had secretly transferred customer funds to his hedge fund, Alameda Research, to cover losses and fund lavish expenditures. The revelations triggered a bank run on the exchange, exposing a massive shortfall in customer deposits and forcing FTX to file for bankruptcy.
Bankman-Fried was subsequently convicted on multiple counts of fraud and conspiracy, receiving a 25-year prison sentence for orchestrating one of the largest financial frauds in American history. The collapse left thousands of customers unable to access their funds and sent shockwaves through the cryptocurrency industry, prompting calls for stricter regulation of digital asset exchanges.
Implications for Celebrity Endorsers
The O’Neal settlement represents a significant development in the ongoing legal fallout from the FTX collapse. Legal experts suggest it could establish precedent for how courts view celebrity liability in promoting financial products. The case highlights the tension between traditional advertising, where celebrities routinely endorse products with limited liability, and the promotion of complex financial investments, where securities laws impose stricter disclosure requirements.
“Celebrities need to understand that promoting investments isn’t like selling sneakers or soft drinks,” said financial regulatory expert Diane Reynolds. “The SEC has been clear that promoting securities without proper disclosures can violate federal law, regardless of whether the promoter understood the product they were endorsing.”
Recovery for Investors
While the celebrity settlements provide some compensation for affected FTX users, they represent only a fraction of the billions lost in the exchange’s collapse. Fortunately for investors, FTX’s bankruptcy estate has made significant progress in recovering assets and has pledged to repay nearly all customer losses, independent of these settlements. This unusual outcome in cryptocurrency bankruptcies has been attributed to the extensive international asset recovery efforts and the rising value of crypto holdings during the bankruptcy process.
The O’Neal settlement specifically covers claims from the class action lawsuit and is separate from the broader bankruptcy proceedings. Under the terms of his agreement, O’Neal cannot seek reimbursement from FTX’s bankruptcy estate, ensuring his payment represents additional recovery for affected users rather than competing with their claims in bankruptcy court.
Sources:
Shaquille O’Neal to Pay $1.8M in Settlement Over FTX Promotion Lawsuit – CoinDesk
Shaq FTX Crypto Class Action Lawsuit SBF Brady Curry Promotion – Fortune
Shaquille O’Neal to pay $1.8 million to settle FTX class action lawsuit – ABC News
Shaquille O’Neal Settles FTX Investor Lawsuit – Black Enterprise
Shaq FTX Settlement Red Flag Investors Celebrity-Backed Crypto – AInvest
