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 center 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.
Stanford to Return Funds in Full
A spokesperson from Stanford University told Bloomberg of their intention to return the funds in full and stated: "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, Trevor Lawrence (NFL quarterback) and Kevin Paffrath and Tom Nash (popular YouTube influencers) 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 Sam Bankman-Fried (FTX's Founder) 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 Shaquille O'Neal (former basketball professional), over $300,000 to Naomi Osaka (tennis player), $270,000 to David Ortiz (former baseball star), and over $200,000 to Trevor Lawrence (American football quarterback).
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, Gisele Bundchen (supermodel), Larry David (comedian), and others were 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.
This article was written by Jared Kirui at www.financemagnates.com.
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