Proposed Settlement: Crypto Users Weigh Dropping Lawsuit Against Sam Bankman-Fried

A group of cryptocurrency users involved in a class-action lawsuit against former FTX CEO Sam “SBF” Bankman-Fried has recently reached a proposed settlement.

According to court filings made on April 19, the plaintiffs, who had sued FTX influencers in 2022, have decided to pursue their case against FTX promoters using information presented during Bankman-Fried’s criminal trial, rather than continuing to pursue judgment against him.

The filing states that Bankman-Fried possesses knowledge and information that the plaintiffs and their counsel believe will be valuable in their cases against other defendants in the FTX multidistrict litigation. 

This information relates to the underlying actions, the connection to the company’s U.S. headquarters in Miami, Florida, and the involvement of other defendants in various states where jurisdiction is asserted.

Plaintiffs to Target FTX Influencers

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 proposal suggests that the plaintiffs offered Bankman-Fried the opportunity to assist in prosecuting FTX influencers and aiding victim recovery by providing documents and testimony from his criminal trial. 

Notably, the information could shed light on the involvement of celebrities and companies such as Naomi Osaka, Tom Brady, Stephen Curry, and Shaquille O’Neal, who endorsed the crypto exchange before its downfall.

The lawsuit was initially filed in November 2022, shortly after FTX filed for bankruptcy, and was consolidated into its current form 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. 

They have also requested that Bankman-Fried remain at the Metropolitan Detention Center in Brooklyn, rather than being transferred to a federal prison in the San Francisco Bay Area, to assist in his defense.

SBF Appeals Fraud Conviction and Sentence

Last week, Bankman-Fried filed to appeal his conviction and sentence for fraud and conspiracy charges. 

The disgraced crypto boss was convicted last November after a month-long trial on seven different charges and was sentenced to 25 years in federal prison.

In an additional court filing, attorneys for the FTX founder requested that Judge Lewis A. Kaplan keep Bankman-Fried at the Metropolitan Detention Center in Brooklyn to “facilitate access to his appellate counsel” as he works to overturn his sentence.

During his sentencing, lawyers for Bankman-Fried called the Metropolitan Detention Center “the worst federal jail in the country,” with prisoners having experienced issues such as lack of access to water and poor electricity.

As reported, 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. 

The FTX bankruptcy consists of two distinct processes, including the Chapter 11 bankruptcy being overseen by a Delaware court in the United States and the official liquidation of FTX Digital, the Bahamas-based subsidiary of FTX.

However, both entities have agreed to collaborate, allowing creditors to submit their claims to either party while ensuring that no creditor receives less than their entitled value.

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