Shaquille O'Neal FTX lawsuit, explained: How Shaq was involved with crypto company and finally served papers

Jacob Camenker

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Shaquille O'Neal FTX lawsuit, explained: How Shaq was involved with crypto company and finally served papers image

Shaquille O'Neal has finally been served.

After a longstanding saga between O'Neal and the lawyers representing the customers of FTX, a process server was finally able to inform the former NBA star that he was being sued.

The papers were served to O'Neal ahead of the Celtics' Game 4 win over the Heat in the Eastern Conference finals. The TNT analyst was working, and the process server was able to intercept him during that time.

"The process server filmed the event to ensure there was no ambiguity like Shaq has been arguing in the FTX case," read a statement from Adam Moskowitz, a lawyer representing the plaintiffs in the FTX case. He also explained that the process server was "kicked out" of the arena after serving O'Neal.

Before the papers were delivered at the game, O'Neal had reportedly been "dodging" the lawyers for months.

But now, O'Neal will have to defend himself as FTX customers look to make back at least some of the billions of dollars lost as a part of the company's collapse.

But what exactly is FTX, and what is O'Neal's involvement with it? Here's what to know about the now-defunct cryptocurrency company.

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What is FTX?

FTX was a cryptocurrency exchange company that was founded in 2019 by Sam Bankman-Fried and Gary Wang. The platform allowed users to exchange various types of digital currencies — such as Bitcoin — for traditional cash. It also served as the home for crypto-based hedge funds.

FTX grew rapidly in popularity in 2021 and reached its peak in July of that year. At that point, it was the third-largest cryptocurrency exchange platform in the world and had more than one million users.

In 2021, FTX made a revenue of $1.02 billion thanks to the cryptocurrency boom, per CNBC. However, the success of the company — which was incorporated in in Antigua and Barbuda and headquartered in the Bahamas — did not last. And by November of 2022, it filed for Chapter 11 bankruptcy.

FTX collapse, explained

FTX's rapid collapse began in November 2022 when CoinDesk released an article outlining that Alameda Research, an FTX-affiliated trading firm that was also owned by Bankman-Fried, owned a great deal of FTX's native cryptocurrency token, FTT.

As the article explained, that brought into question just how many real assets Bankman-Fried's companies had to their respective names.

While there is nothing per se untoward or wrong about that, it shows Bankman-Fried’s trading giant Alameda rests on a foundation largely made up of a coin that a sister company invented, not an independent asset like a fiat currency or another crypto. The situation adds to evidence that the ties between FTX and Alameda are unusually close.

In the wake of this article, Changpeng Zhao, the CEO of Binance — a rival exchange of FTX and the largest in the world — announced on Twitter that his company would "liquidate any remaining FTT" on the company's books.

That announcement led to a bank run of sorts, as investors rapidly lost confidence in the value of FTT. Over a three-day period, $6 billion in withdrawals were made, per Reuters, as investors sold their FTT en masse. That eventually led FTX to halt withdrawals from its platform, as it faced a "liquidity crunch" and was unable to meet the demand of the investors.

As this unfolded, Binance reached an initial agreement to buy FTX — contingent on it completing due diligence about the company — to cover the firm's gap in liquidity. Ultimately, that never happened. Binance withdrew its offer just a day after originally making it, citing reports of "mishandled customer funds and alleged U.S. agency investigations," per CNBC.

"In the beginning, our hope was to be able to support FTX’s customers to provide liquidity," Binance wrote in a tweet. "But the issues are beyond our control or ability to help."

As a result, FTX, which had been valued at $32 billion by private investors earlier in the year, began Chapter 11 bankruptcy proceedings. Meanwhile, Bankman-Fried was arrested by Bahamian authorities at the request of the United States. He is being charged with wire fraud, securities fraud, money laundering and more that led to the downfall of FTX — and the loss of billions for its investors.

John J. Ray III, who helped recover creditor funds from Enron after its collapse in 2001, was named the CEO of FTX after the bankruptcy proceedings began. He gave a scathing review of what had unfolded under Bankman-Fried's watch.

"Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here," Ray said in a court filing, per ABC. "From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented."

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How was Shaquille O'Neal involved with FTX?

Shaquille O'Neal's involvement with FTX was as a spokesperson for the company. He appeared as a voiceover for the company in a commercial that also included Stephen Curry.

Shaq also appeared in an announcement by FTX that the two were partnering together. That was posted to social media on June 1, 2022.

O'Neal frequently has invested in companies for which he is a spokesperson before, and that is how he amassed a net worth of $400 million at the end of 2022, per Forbes.

However, O'Neal has insisted since the company's bankruptcy that his involvement with FTX did not run that deep.

“A lot of people think I’m involved, but I was just a paid spokesperson for a commercial,” O’Neal told CNBC.

FTX lawsuit: Why it took so long for Shaq to be served papers

Though O'Neal is now involved in the FTX lawsuit, it took a long time for that to happen. There was a reason for that, as the lawyers involved in the case explained.

They simply were not able to serve O'Neal the papers involved in the lawsuit in person, as Adam Moskowitz, one of the lawyers for the FTX investors, explained.

"In 30 years, I’ve never had to deal with this situation," Moskowitz told the Wall Street Journal. "We are not going away."

The lawyers representing the FTX customers reportedly tried to serve O'Neal at his home, at the TNT studios and even at his ex-wife's house. The process server has been working on doing this over "months and multiple tries."

One particularly notable attempt to serve O'Neal came at his home. The process server attempted to present the lawsuit to O'Neal, but he drove by them in what was referred to as a "fast-breaking SUV." They tried tossing the service papers into the car, but it wasn't deemed to be an official serving.

O'Neal denied that he wasn't trying to avoid the service. Instead, he claimed that he "drove past the strangers lurking outside his home." And his lawyers wrote in a statement that the burden of serving O'Neal falls on the legal team of the plaintiffs.

“Mr. O’Neal has not evaded service by failing to be at the residences where Plaintiffs belatedly attempted service or by driving past strangers who approached his car,” the lawyers wrote. “The Court should quash service and dismiss the claims against him.”

Even still, O'Neal was officially served less than a week after that story ran. So, perhaps the lawyers going public with news of the lawsuit influenced him to finally get served.

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Other athletes involved in FTX lawsuit

O'Neal isn't the only athlete involved in the FTX lawsuit. The company had numerous athlete spokespeople involved in its advertising campaign. Below are some of the most notable ones.

  • Tom Brady
  • Stephen Curry
  • Udonis Haslem
  • Trevor Lawrence
  • Shaquille O’Neal
  • Shohei Ohtani
  • David Ortiz
  • Naomi Osaka

Jacob Camenker

Jacob Camenker Photo

Jacob Camenker first joined The Sporting News as a fantasy football intern in 2018 after his graduation from UMass. He became a full-time employee with TSN in 2021 and now serves as a senior content producer with a particular focus on the NFL. Jacob worked at NBC Sports Boston as a content producer from 2019 to 2021. He is an avid fan of the NFL Draft and ranked 10th in FantasyPros’ Mock Draft Accuracy metric in both 2021 and 2022.