FTX Lawsuit Prompts Stanford University To Return Gifts

Republished By Plato

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Stanford
University will return millions of dollars it received from FTX and its affiliated
entities. This move comes amidst a lawsuit filed by the advisors of FTX, who
seek to recover funds owed to customers of the bankrupt crypto exchange. FTX
alleges that the parents of its Co-Founder and former CEO, Sam Bankman-Fried,
enriched themselves with millions of dollars through their influence over FTX.

Allan Joseph
Bankman and Barbara Fried, who are legal scholars and professors at Stanford
Law School, have found themselves at the centre of this controversy. The
lawsuit claims that Stanford University received gifts worth approximately $5.5
million from FTX-related entities between November 2021 and May 2022.

A
spokesperson from Stanford University told Bloomberg of their intention to
return the funds in full, stating, “We have been in discussions with
attorneys for the FTX debtors to recover these gifts, and we will be returning
the funds in their entirety.” The spokesperson clarified that these gifts
were primarily intended for the prevention of the pandemic and research.

In a separate
report, FTX and its affiliated hedge fund firm, Alameda Research, disclosed
their efforts to pursue
the recovery of $71 million in July that the bankrupt cryptocurrency exchange
purportedly spent on philanthropic endeavours. This involves alleged
donations to life science companies.

FTX’s legal
team initiated proceedings in a US bankruptcy court in Delaware, accusing
several life science companies, including Lumen Bioscience Inc., Greenlight
Biosciences Holdings, and Platform Life Sciences Inc., of receiving funds from
the now-collapsed exchange.

Meanwhile,
NFL quarterback Trevor Lawrence, popular YouTube influencers Kevin Paffrath, and Tom Nash have reached
a settlement in a lawsuit related to their endorsements of FTX. The terms
of this settlement, which marks the first resolution among more than a dozen
celebrities and firms accused of assisting FTX Founder Sam Bankman-Fried in the
alleged deception of investors, have not been disclosed.

This lawsuit
has garnered attention due to its allegations that celebrity endorsements
significantly contributed to the rise of FTX but failed to disclose details of their
deals and compensation to investors. Notable figures, including Tom Brady,
Gisele Bundchen, Steph Curry, Shaquille O’Neal, and Larry David, who endorsed
FTX, are facing similar legal actions.

FTX’s
Celebrity Endorsement Payments Under Scrutiny

According to
a recent court filing, FTX’s financial advisors have compiled a list of names
and entities to explore the possibility of reversing
the payments made to them as part of the exchange’s marketing campaigns.
The list includes payments such as $750,000 to former basketball professional
Shaquille O’Neal, over $300,000 to tennis player Naomi Osaka, $270,000 to
former baseball star David Ortiz, and over $200,000 to American football
quarterback Trevor Lawrence.

FTX’s
marketing efforts extended beyond celebrity endorsements. The exchange secured
naming rights to the Miami Heat arena, although the association was dissolved
following its collapse. Other high-profile names like Tom Brady, supermodel
Gisele Bundchen, comedian Larry David, and more were also associated with FTX.

Many of these
celebrities have been named in class-action lawsuits filed by former FTX
customers whose funds are now tied up in bankruptcy proceedings.

FTX’s
Celebrity Endorsement Payments Under Scrutiny

Many of these
celebrities have been named in class-action lawsuits filed by former FTX
customers whose funds are now tied up in bankruptcy proceedings.