A consortium of FTX investors has reached an agreement to withdraw legal claims against Sam Bankman-Fried. In return, the former disgraced CEO of the crypto exchange has agreed to assist the investors in their legal actions against other defendants related to the collapse of FTX, including various celebrities who were paid to endorse the exchange. This development was disclosed in court documents submitted on Friday, April 19, as reported by Bloomberg News.

The settlement follows Bankman-Fried’s recent sentencing to 25 years in prison for the fraudulent activities that precipitated the multibillion-dollar downfall of FTX in November 2022. Former investors and clients of FTX have initiated lawsuits against individuals who promoted the platform during its peak, alleging complicity in the exchange’s fraudulent activities.

As per the terms of the settlement, the plaintiffs believe that Bankman-Fried possesses valuable knowledge and information pertinent to the case. Additionally, Bankman-Fried has agreed to provide non-privileged documents detailing his assets, investments in the AI startup Anthropic, and a sworn statement verifying his negative net worth. He will also disclose any insights he may have regarding venture capital firms that backed FTX and the legal and financial professionals associated with the company.

Prior to facing criminal charges, a group of investors had already sued FTX’s celebrity endorsers, which include Tom Brady, Gisele Bündchen, and Shaquille O’Neal, for alleged violations of securities laws due to inadequate due diligence.

The recent settlement occurred shortly after Bankman-Fried lodged an appeal against his conviction and sentencing, indicating a potentially protracted legal process. Notably, Bankman-Fried’s former attorney, Mark Cohen, highlighted a perceived disparity between his client’s 25-year sentence and that of Binance founder Changpeng Zhao, who faces a shorter term for breaching anti-money laundering regulations.

While the imposed 25-year sentence fell below the prosecution’s request for 40 to 50 years, it significantly exceeded the defense’s proposal of five to six years. Judge Lewis Kaplan emphasized the importance of fairness in the criminal justice system, underscoring the gravity of the crime committed by Bankman-Fried.

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