The collapse of cryptocurrency exchange FTX has produced some initial payouts in court. Bloomberg is reporting that at least three settlements have been reached in a class action case that targets influencers who shilled for FTX. NFL quarterback Trevor Lawrence has settled with the plaintiffs, as have creators Kevin Paffrath (pictured above) and Tom Nash.
Bloomberg identified Lawrence, Paffrath, and Nash as the three defendants who were named in a court filing that discussed the settlements. The terms of their respective agreements with the litigious investors were not disclosed.
The complaint was originally filed back in March, five months after FTX collapsed and filed for bankruptcy. The original defendants included more than a dozen celebrities, including a laundry list of financial and tech influencers: Paffrath, Nash, Graham Stephan, Andrei Jikh, Jaspreet Singh, Brian Jung, Jeremy Lefebvre, Ben Armstrong, and Erika Kullberg.
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The investors who filed the suit argued that the aforementioned creators helped FTX “position itself as the ‘safe’ option among cryptocurrency exchanges.” In truth, FTX Founder Sam Bankman-Fried had built a volatile empire that collapsed after the creator endorsements went live.
Paffrath was one of the only defendants who offered a public comment after the lawsuit went live. “I’ve always been a believer that crypto is speculative and short of regulation, and if someone chooses to engage in crypto, that is on them,” the real estate broker told Tubefilter at the time. He made similar claims in a video he posted in response to the allegations against him.
The other creators named in the case have yet to announce whether they have reached settlements as well. Per Bloomberg, lawyers for the defense are arguing that investor losses can be tied to “FTX’s misappropriation and mismanagement” rather than its celebrity endorsements.
The question of FTX’s culpability will soon have its own day in court. Bankman-Fried has been held in jail ahead of a fraud trial that’s set to begin on October 3. Bankman-Fried has pleaded “not guilty,” even though creators like Coffeezilla have argued that the collapse of FTX was no accident.