NFL star Trevor Lawrence and 2 YouTube influencers settled the FTX endorsement class-action: Report

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NFL quar­ter­back Trevor Lawrence, along­side YouTube influ­encers Kevin Paf­frath and Tom Nash, has agreed to set­tle a law­suit relat­ed to their endorse­ment of the now-defunct FTX cryp­tocur­ren­cy exchange, Bloomberg report­ed on Sept. 16, cit­ing a court filing.

The terms of the set­tle­ment remain undis­closed. These set­tle­ments mark the first res­o­lu­tions among over a dozen celebri­ties and firms accused of assist­ing Sam Bankman-Fried, the founder of FTX, in dup­ing investors. Bankman-Fried is set to face his crim­i­nal tri­al in Man­hat­tan next month.

Oth­er high-pro­file indi­vid­u­als, includ­ing Tom Brady, Gise­le Bund­chen, Steph Cur­ry, Shaquille O’Neal, and Lar­ry David, who endorsed FTX, are also fac­ing law­suits. These class-action suits are con­sol­i­dat­ed in a fed­er­al court in Mia­mi, along with com­plaints against ven­ture cap­i­tal and pri­vate equi­ty firms that invest­ed in FTX, such as Sequoia Cap­i­tal and Thoma Bravo.

FTX gar­nered sig­nif­i­cant atten­tion through celebri­ty endorse­ments, includ­ing nam­ing rights to the Mia­mi Heat’s are­na and a Super Bowl com­mer­cial fea­tur­ing Lar­ry David. Lawyers rep­re­sent­ing the plain­tiffs in the $1 bil­lion case against endorsers told Bloomberg that they are “engaged in ongo­ing con­fi­den­tial, set­tle­ment dis­cus­sions” with oth­er defen­dants, and there is a “like­li­hood that oth­er FTX set­tle­ments will be reached.”

The law­suit alleges that FTX’s celebri­ty endorse­ments con­tributed to the platform’s rise but asserts that the endorsers failed to dis­close details of their deals and com­pen­sa­tion to investors. At the time of fil­ing, the law­suit stated:

“Though FTX paid Defen­dants hand­some­ly to push its brand and encour­age their fol­low­ers to invest, Defen­dants did not dis­close the nature and scope of their spon­sor­ships and/or endorse­ment deals, pay­ments and com­pen­sa­tion, nor con­duct ade­quate (if any) due diligence.”

Lawrence, the first over­all NFL draft pick in 2021, signed an endorse­ment deal with FTX, receiv­ing a $500,000 pay­ment in cryp­tocur­ren­cy. Kevin Paf­frath, known as a “land­lord influ­encer,” pro­mot­ed FTX on his YouTube chan­nel, “Meet Kevin,” for which he was alleged­ly paid $2,500 for each men­tion of the platform.

Lawyers for the endorsers argue that the adver­tise­ments didn’t encour­age users to actu­al­ly deposit mon­ey into FTX accounts. More­over, the lawyers main­tain that the endorsers had no hand in the alleged “FTX’s mis­ap­pro­pri­a­tion and mismanagement.”

After FTX col­lapsed in Novem­ber 2022, Paf­frath and Nash removed their FTX endorse­ments from their YouTube chan­nels and issued apologies.

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