Latest blockchain news: FTX advisors conducted an analysis to assess the possibility of refunding some of the payments made by the bankrupt crypto exchange to several sports champions and sports organizations.
Specifically, these funds had been earmarked for internationally renowned athletes, including basketball legend Shaquille O’Neal, and sports teams such as the NBA’s Miami Heat and the Formula 1 Mercedes team, through sponsorship and advertising deals.
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Summary
Crypto news: FTX in search of millions paid to athletes and sports clubs
As anticipated, financial advisers, now serving FTX’s new management, have conducted an investigation into the possibility of recovering millions of dollars paid to professional athletes, sports clubs and associations involved in promoting digital assets before the crypto exchange’s collapse which occurred this past fall.
According to documents cited by Bloomberg, financial experts examined payments made to the likes of former National Basketball Association (NBA) player Shaquille O’Neal (known as Shaq) and tennis star Naomi Osaka, among others, to determine whether such payments can be voided under the rules that apply to transactions that occurred shortly before the Chapter 11 bankruptcy filing.
Recall that FTX, a major Bahamas-based cryptocurrency exchange, had filed for bankruptcy protection in the United States in November 2022 due to liquidity problems.Â
Meanwhile, its founder and former CEO, Sam Bankman-Fried (known as SBF), is facing fraud and other charges, with trial scheduled for October.
The payments made to athletes and sports leagues were intended to promote the cryptocurrency exchange and, according to consultants, many of them represented advances for advertising or sponsorship deals with organizations such as Major League Baseball (MLB) and NBA teams.
Although FTX pointed out that the information provided by the consultants may be incomplete, data emerged indicating a transfer of about $4.9 million destined for the MLB, a connection of an additional $12.2 million for partnership agreements with the Mercedes-AMG Petronas Formula One team, and a payment of $3.4 million to the NBA.
Million-dollar payments to celebrities and sports teams involved in the FTX affair: further legal developments
In August 2022, an FTX affiliate disbursed $2.5 million to a division of Authentic Brands Group linked to Shaquille O’Neal, part of a total payment of $4.3 million to Shaq and his company.
In addition, additional payments of $2 million were reportedly made to Naomi Osaka in early November, just days before FTX filed for bankruptcy, out of a total of about $3.2 million in payments to the tennis star under partnership and sponsorship agreements.
Other athletes and sports teams mentioned in court documents include Jacksonville Jaguars quarterback Trevor Lawrence, retired Boston Red Sox champion David Ortiz, as well as the NBA’s Washington Wizards and the Miami Heat.
It is worth noting that some of these payments were made about a month before FTX filed for Chapter 11 protection.
The report highlights that these revelations emerge after FTX’s new management team took legal action against a venture capital firm that allegedly linked Sam Bankman-Fried to NBA stars and other celebrities.
O’Neal, Osaka and the Warriors, along with other athletes and teams, have legally challenged any liability in the losses suffered by investors.
In July, FTX also filed a lawsuit against Bankman-Fried and other former FTX executives in an attempt to recover more than $1 billion. SBF has been accused of diverting billions of dollars from FTX clients’ funds to purchase expensive properties, political donations, and finance its other activities, such as the hedge fund Alameda Research.
Scandals and confiscations: the latest twists and turns in the FTX and Celsius cases
Former FTX executive Ryan Salame recently pleaded guilty in a New York federal court, facing charges of conspiring to make illegal political contributions and operating an unlicensed money transfer business.
Salame was released on $1 million bail and admitted making unauthorized political contributions totaling $10 million in the form of loans. He also agreed to divest assets worth $1.6 billion and relinquish two properties and a Porsche.
We emphasize that Salame is the fourth individual to plead guilty in connection with the FTX collapse. Prosecutors allege that he and his accomplices made more than 300 illegal political donations, often using puppet donors.
Salame had previously been investigated for potential campaign finance violations in connection with the 2022 congressional campaign of his girlfriend, Michelle Bond.
Despite his guilty plea, Salame said he does not plan to testify in the upcoming criminal trial against former FTX CEO Sam Bankman-Fried.
Meanwhile, the assets and property of Alex Mashinsky, former CEO of Celsius, have been frozen by order of the US District Court for the Southern District of New York, led by Judge Jed Rakoff.
This freeze involves funds at Goldman Sachs, Merrill Lynch and SoFi Bank, as well as a residence in Austin, Texas.
