Shaquille O’Neal Agrees to $1.8M Settlement in FTX Promotion Lawsuit

O’Neal’s $1.8 million settlement will cover legal fees, administrative costs, and restitution for investors who claim to have suffered losses due to his promotional efforts. The agreement also bars O’Neal from seeking reimbursement from the FTX bankruptcy estate, effectively closing the door on any financial clawback attempts.

Plaintiffs in the case assert that the endorsement created a false sense of security and encouraged them to invest money into the exchange or purchase FTX’s proprietary token, FTT. When the platform collapsed in November 2022, many retail users were left with unrecoverable losses. The lawsuit contends that the celebrity promotions played a critical role in legitimizing FTX’s fraudulent operations.

O’Neal maintained in a 2023 interview that he was simply a “paid spokesperson” and did not have significant involvement in the crypto industry.

But the court did not side with O’Neal’s argument. U.S. District Judge K. Michael Moore ruled in 2024 that celebrity endorsers could be held liable under law if their promotional activities materially influenced consumers’ investment decisions, even if the endorsers lacked technical expertise in the underlying financial products.

In light of these developments O’Neal agreed to the $1.8 million settlement. As part of the agreement, he denies any wrongdoing or liability.

The collapse of FTX sent shockwaves through the cryptocurrency industry and broader financial markets. Once valued at over $30 billion and backed by top venture capital firms and sports partnerships, FTX filed for bankruptcy in November 2022 after it was revealed that the exchange had misused customer funds to support risky bets by its sister hedge fund, Alameda Research.

Its founder and former CEO, Sam Bankman-Fried, was convicted in 2023 on seven federal charges, including wire fraud and securities fraud. He is currently serving a 25-year sentence following his conviction in March 2024.

FTX had aggressively pursued celebrity endorsements in its marketing strategy, sponsoring stadium naming rights (FTX Arena in Miami), NBA team deals, and high-profile television commercials. Legal experts say these efforts played a powerful role in mainstreaming the exchange’s image, especially to non-traditional investors who were drawn by familiar faces rather than regulatory safeguards.

While O’Neal’s settlement does not imply guilt, it could set a precedent for other celebrities facing similar lawsuits. Legal representatives for the plaintiffs have already indicated that negotiations are ongoing with other figures named in the class action.

O’Neal’s legal entanglements reflect a broader reckoning within the crypto sector, where regulatory scrutiny has expanded in tandem with financial collapses. The U.S. Securities and Exchange Commission (SEC) has warned repeatedly that promotional activities involving unregistered securities—particularly by influencers and celebrities—may violate federal law.

For Shaquille O’Neal, the $1.8 million settlement may mark the end of his direct involvement in the FTX debacle, but it also serves as a lasting reminder of the risks associated with the convergence of celebrity and finance.