A group of cryptocurrency users involved in a class-action lawsuit against former FTX CEO Sam “SBF” Bankman-Fried has reached a proposed settlement as per court filings made on April 19. The plaintiffs have decided to pursue their case against FTX promoters using information from Bankman-Fried’s criminal trial instead of pursuing judgment against him. This information is believed to be valuable in their cases against other defendants in the FTX multidistrict litigation, specifically relating to the company’s US headquarters in Miami, Florida. If approved by the court, the settlement would resolve the lawsuit between Bankman-Fried and the crypto users seeking compensation for losses incurred during the collapse of FTX.
The lawsuit against Bankman-Fried and other FTX influencers was originally filed in November 2022, shortly after FTX filed for bankruptcy, and was consolidated in June 2023. The Moskowitz Law Firm, known for handling crypto-based class-action lawsuits, represents the plaintiffs in this case. Bankman-Fried’s legal team filed a notice to appeal his conviction and sentence on April 11, and requested that he remain at the Metropolitan Detention Center in Brooklyn to assist in his defense. The proposed settlement suggests that Bankman-Fried was offered the opportunity to assist in prosecuting FTX influencers and aiding in victim recovery by providing documents and testimony from his criminal trial.
Bankman-Fried recently filed to appeal his conviction and sentence for fraud and conspiracy charges, for which he was convicted last November and sentenced to 25 years in federal prison. His attorneys requested that he remain at the Metropolitan Detention Center in Brooklyn to facilitate access to his appellate counsel as he works to overturn his sentence. The detention center has been described as the worst federal jail in the country, with reports of issues such as lack of access to water and poor electricity. The FTX bankruptcy estate has outlined its target to initiate repayments to customers by the end of 2024 as disclosed during a meeting of FTX Digital’s Joint Official Liquidators in the Bahamas, consisting of a Chapter 11 bankruptcy overseen by a Delaware court in the US and the official liquidation of FTX Digital.
The proposed settlement between Bankman-Fried and the cryptocurrency users is aimed at resolving the class-action lawsuit against FTX influencers, potentially shedding light on the involvement of celebrities and companies like Naomi Osaka, Tom Brady, Stephen Curry, and Shaquille O’Neal who endorsed the crypto exchange before its downfall. Bankman-Fried’s knowledge and information from his criminal trial are believed to be valuable in the cases against other defendants in the FTX multidistrict litigation, particularly concerning the actions and connections to the company’s headquarters in Miami, Florida. The settlement would allow the plaintiffs to pursue compensation for their losses during the collapse of FTX, with Bankman-Fried offering assistance in prosecuting FTX influencers and aiding in victim recovery.
The lawsuit against FTX influencers was filed soon after FTX’s bankruptcy filing in 2022 and was consolidated into its current form in 2023, with the Moskowitz Law Firm representing the plaintiffs. Bankman-Fried’s appeal of his conviction and sentence for fraud and conspiracy charges includes a request to remain at the Metropolitan Detention Center in Brooklyn during the appeals process to facilitate access to his appellate counsel. The FTX bankruptcy estate aims to begin repayments to customers by the end of 2024 through a collaboration between the Chapter 11 bankruptcy overseen by a Delaware court in the US and the official liquidation of FTX Digital in the Bahamas, ensuring that creditors receive no less than their entitled value.
