FTX’s financial advisers are investigating the possibility of recovering funds the exchange paid to celebrities to promote the brand.
- FTX may ask famous athletes to return sponsorship fees
- During its heyday, the exchange had numerous trades with celebrities
- FTX board seeks to recover funds to pay creditors
The once-popular but now-bankrupt cryptocurrency exchange FTX apparently intends to recoup some of the funds it paid to sports celebrities who once promoted it.
FTX Group advisers are analyzing whether they can recoup millions of dollars paid to athletes and professional teams promoting the platform, Bloomberg reported. The report cited court documents mentioning basketball and tennis stars Shaquille O’Neal and Naomi Osaka.
At its peak in 2021, the company founded by Sam Bankman-Fried struck multimillion-dollar branding deals, including a stadium naming rights deal and collaborations with numerous celebrities. Some of the famous names associated with the exchange include Stephen Curry, Tom Brady, Gisele Bundchen, and even Taylor Swift came close to signing a $100 million deal with FTX.
However, everything changed when the exchange filed for bankruptcy in November 2022. FTX’s sensational and dramatic collapse wreaked havoc on investors and customers, who suffered millions of dollars in losses. Celebrities who have promoted the platform have also faced problems, with many being sued.
FTX’s new leadership, led by bankruptcy expert John J. Ray III, has been working to redeem millions of dollars the company owes creditors. According to reports, this may include payments to the assets of some celebrities.
Financial advisers hired by FTX revealed in court documents that they have analyzed whether certain payments to athletes can be recovered under Chapter 11 of the U.S. Bankruptcy Code. Advisors reviewed payments to O’Neill, Osaka and others to determine whether the transfers were subject to Chapter 11. Citing court documents, the publication noted rules that allow companies to undo transactions that occurred before filing for bankruptcy.
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A few weeks ago, lawyers for the failed cryptocurrency exchange filed legal action against former CEO Sam Bankman-Fried, seeking to recover approximately $250 million related to the Embed acquisition.
FTX’s new board of directors has advanced plans to reopen the international platform as part of efforts to raise funds to pay creditors. Meanwhile, Bankman-Fried is preparing for a trial that begins in October. Although the founder maintains his innocence, he faces more than a dozen criminal charges, including fraud.
Article author: Hannah Estefanía Pérez / daily bitcoin
Image from Unsplash
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