Struggling FTX Crypto Exchange Seeks to Retrieve Funds from High-Profile Promotions

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Mon, 02 Oct 2023, 06:46 PM
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Struggling FTX Crypto Exchange Seeks to Retrieve Funds from High-Profile Promotions

FTX Crypto Exchange aims to recoup promotional funds from athletes and teams amidst financial woes.

Fri, 15 Sep 2023, 10:43 am UTC

Financial turbulence for FTX, a once-prominent cryptocurrency exchange, has led the platform to consider the possibility of recouping promotional fees paid to famous sports personalities and teams. Last year, the platform faced bankruptcy, and since then, it has been revisiting its marketing strategies.

According to recent court documents dated August 31, FTX has been keeping tabs on substantial amounts disbursed as promotional incentives. These transactions include a sum of $750,000 to basketball legend Shaquille O’Neal and over $300,000 to tennis champion Naomi Osaka. Other notable mentions are former baseball icon David Ortiz who received more than $270,000 and football player Trevor Lawrence, who was paid upwards of $200,000.

Pro basketball team, the Golden State Warriors, received close to $420,000, while the Miami Heat got over $250,000. The exchange, however, notes that the actual amount to be retrieved might differ significantly from what's documented.

FTX's legal maneuvers are not limited to this. Several renowned personalities named in the filing have also been entangled in lawsuits. FTX clients have initiated class-action suits, claiming damages. Individuals like O’Neal, Osaka, and the Golden State Warriors are under scrutiny for endorsing the platform. Allegations suggest the exchange marketed unregistered securities.

FTX hasn't been passive either. In its attempts to stabilize its financial position, it has actively sought to recover its assets. One of the most recent cases was lodged on September 9 against LayerZero Labs, accusing the firm of illicitly pulling out $21 million just before FTX declared bankruptcy the previous year.

Earlier, in July, the exchange took legal action against its co-founder, Sam Bankman-Fried, and some of its former top brass. The objective was clear: reclaim over $1 billion suspected of wrongful appropriation.

The trajectory of FTX's financial challenges is emblematic of the risks associated with cryptocurrency. As the exchange grapples with its past decisions, the spotlight remains on its recovery tactics and the broader implications for the crypto sector.

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