Shaq's FTX Settlement: A Warning Shot or Just Another Slap on the Wrist?

$1.8 million. That's the figure Shaquille O'Neal, a man whose net worth dwarfs many small nations' GDPs, is shelling out to settle a class-action lawsuit related to his promotion of FTX. On the surface, it sounds like justice. But dig a little deeper, and the question becomes: is this real accountability, or just a celebrity tax write-off?

Justice Delayed, Justice Denied?

Let's be blunt. The collapse of FTX goes far beyond a standard business failure. It was a complete and utter disaster for unsophisticated investors. They invested their hard earnings, their aspirations, their tomorrows into this only to have their money melt, trusted celebrity endorsements from the likes of Shaq. When their kids saw this giant, friendly face show up on their screen they were like, F—-, if Shaq is involved— this is credible. As a result, now countless people are stuck holding the bag with their financial lives destroyed.

How is $1.8 million ever going to make them whole? Absolutely not. Yet it’s a pittance, a drop in the ocean compared to the billions we’re losing. I recognize that settlements by their nature require a compromise. This one really does look like it is sticking the burden on those least able to afford it.

Here is the summary of the victims and the compensation that they might get:

Think about it. Shaq made millions endorsing FTX. Millions. But he personally made out like a bandit selling and peddling the one product that ended up defrauding millions. And now, he gets to cash out for a comparatively paltry amount, essentially purchasing his exit from any continued oversight. Where's the justice in that?

I’ve learned from this earlier pattern, not only in crypto, but throughout industries. Ordinary people in America would be in jail for the things that big names get away with. It's a two-tiered system, and it's infuriating.

Celebrity Responsibility, A Real Thing?

We live in an age of influence. Celebrities have a lot of influence and can be hugely impactful in changing perceptions and influencing consumer action. When they endorse a product, they’re not just lending their face — they’re lending their credibility.

What’s the risk when that credibility is misplaced? What’s the liability when a celebrity endorses a product that is later revealed to be a total fraud? Are they just victims of circumstance, or should they be held partially accountable for the damage done?

I argue that they absolutely do. In the wild and often lawless realm of crypto, celebrities should be held to the highest standard. They should have to do rigorous research on products before they publicize them to their millions of followers. They should be required to disclose any conflicts of interests should they arise and the level of risk associated with their recommendation.

“I just liked the product” is no longer sufficient. With millions of followers literally at your fingertips, you are one of the most influential people in the game. It’s now critical to use that power effectively. Remember the meme coin mania? Dogecoin’s recent drop was largely ignited by increased overall market fears around geopolitical tensions, specifically the growing conflict between Israel and Iran. This decline highlights the unmistakable risks related to these assets. The volatility that draws so many investors also creates serious risks. This risk is particularly acute for novices lured in by celebrity fanfare.

This isn't just about crypto. It’s not just the narrower question of pretty much all celebrity endorsements being harmful to cause celebrity endorsements to be harmful. Perhaps first and foremost, we must demand higher standards for celebrity accountability for the products they endorse — and especially those that put consumers at a financial risk.

Beyond The Settlement, What Next?

The Shaq settlement is a good first step, but it’s just that— a start. If we want to avoid more future FTX-style disasters, we must demand systemic change.

Like many in the crypto community, I am concerned about where our space is headed. On one hand, you see the SEC appointing crypto-native professionals like Jamie Selway, signaling a potential shift towards more informed regulation. On one side, you have the SEC rolling back Gensler-era rules on crypto, which might introduce even more uncertainty. Get out that crystal ball and don’t forget about the lasting litigation still playing out! Take for instance the prosecution of Tornado Cash founder Roman Storm — actions like these threaten to suffocate DeFi innovation.

• Stricter regulations on celebrity endorsements in the crypto industry. Require full disclosure of financial incentives and impose penalties for misleading promotions.
• Increased investor education. Help people understand the risks of crypto and other speculative investments.
• Greater accountability for crypto exchanges. Hold them responsible for the products they list and the marketing tactics they employ.

What we want is a middle ground – an approach that encourages innovation but shields investors from fraud and bad actors. The Shaq settlement should serve as a wakeup call that we’re not quite there yet.

Could this settlement serve as a broader deterrent to celebs who recklessly endorse crypto? Or is it merely a slap on the wrist?

It’s time to call for increased accountability, stricter regulations, and a more responsible approach to celebrity endorsements. Only then can we do justice to the victims of future tragedies and protect everyday investors from financial devastation. We need to take bold actions now, or the next scandal will be larger still, and the damage much more catastrophic.

It's up to us to make sure it's the former. We need to demand greater accountability, stricter regulations, and a more responsible approach to celebrity endorsements. Only then can we prevent future tragedies and protect ordinary investors from financial ruin. We must act now, or the next scandal will be even bigger, and the consequences even more devastating.