Shaq Signs $1.8 Million Check to End His Crypto Drama
Shaquille O'Neal can finally breathe a sigh of relief. The basketball legend turned businessman and TV personality has agreed to pay $1.8 million to settle a class-action lawsuit over his role in promoting the now-defunct cryptocurrency exchange FTX.
While the payment closes a legal chapter for the former Laker, it also marks a turning point in how courts are treating celebrity endorsements in the volatile world of crypto, a space where stardom once offered both hype and cover.
O'Neal is among the first big names to reach a settlement in the high-profile FTX case, which also names football legend Tom Brady, his ex-wife Gisele Bündchen, NBA superstar Steph Curry, tennis player Naomi Osaka, and Seinfeld creator Larry David. Some of the claims against these celebrities, who say they weren't aware of the risks, have already been dismissed.
But O'Neal's decision to settle stands out.
He was accused of promoting FTX to his fans and investors, appearing in a string of marketing campaigns. In return, the company allegedly sponsored his music festival venture, Shaq's Fun House. According to the lawsuit, O'Neal promoted the partnership through social media posts and videos. He was allegedly paid $750,000 for his endorsement.
'Plaintiffs seek class-wide relief from Mr. O'Neal, who was an alleged influencer and celebrity paid by FTX to present FTX to his followers and event attendees as a safe and legitimate alternative to other cryptocurrency exchanges,' states the court document (FTX Cryptocurrency Exchange Collapse Litigation, Docket No. 1:23-md-03076, S.D. Fla. Jun 5, 2023).
An initial settlement was reached last November. It was unveiled in May by the court, and on June 9, the final $1.8 million agreement was filed in the U.S. District Court for the Southern District of Florida by Adam Moskowitz, the plaintiffs' attorney. O'Neal must pay the amount within 30 days.
FTX, which filed for Chapter 11 bankruptcy on Nov. 11, 2022, had become a crypto juggernaut thanks in part to its celebrity ambassadors. But behind the scenes, the platform was using customer assets as collateral to borrow funds that were funneled to its sister company, Alameda Research, for trading and investments. When the house of cards collapsed, both companies went under, sparking lawsuits against founder Sam Bankman-Fried, his inner circle, and the stars who endorsed the brand.
O'Neal's settlement isn't just about resolving his personal liability. It's a wake-up call to celebrities who cashed in on the crypto boom without fully understanding, or disclosing, the risks.
'I don't understand it,' O'Neal told CNBC in 2021 about cryptocurrencies. 'So, I will probably stay away from it until I get a full understanding of what it is.' He added, 'From my experience, it is too good to be true.'
Yet he didn't stay away.
Since the FTX implosion, regulators like the Securities and Exchange Commission and the Federal Trade Commission have been cracking down on undisclosed paid crypto endorsements. The SEC now emphasizes 'fair disclosure' and 'financial literacy,' warning that fame is no longer a shield.
The message to celebrities is unequivocal: if you promote it, you are now expected to 'own' it, even if the venture collapses.
And this isn't Shaq's only crypto-related legal headache. Last November, he was ordered to pay $11 million to settle a separate lawsuit involving Astrals, a failed non-fungible tokens (NFT) project he co-founded with his son Myles O'Neal. (NFTs are digital collectibles that can be owned, sold, or traded online.) The project promised a metaverse experience where users would interact via NFT avatars. But after FTX's downfall, Shaq reportedly distanced himself from the venture, leaving investors to fend for themselves.
Now, with $12.8 million in crypto settlements under his belt, O'Neal may think twice before lending his name to another crypto venture.
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