On June 12, a seemingly ordinary celebrity settlement marked a symbolic end to a frenzied era in the cryptocurrency industry. According to CNBC, NBA legend Shaquille O'Neal has agreed to pay $1.8 million to settle a class action lawsuit arising from his promotion of the now-bankrupt cryptocurrency exchange FTX.
This payment is not only the cost O'Neal pays for his 'paid endorser' status but also a clear signal: the era of 'borrowed credibility' that relied on celebrity charisma and endorsements from sports giants is coming to an end with legal accountability.
The collapse of 'borrowed credibility': The legacy and lessons of the FTX model
To understand the far-reaching impact of the O'Neal case, one must return to the marketing model led by FTX. During the bull market cycle of 2021-2022, crypto exchanges led by FTX faced a core dilemma: how to rapidly gain public trust in the absence of traditional financial regulatory endorsement? Their solution was: borrowed credibility.
By collaborating with household sports icons like Tom Brady, Stephen Curry, and O'Neal, FTX cleverly transplanted the decades of personal credibility these stars accumulated in their fields onto its own brand. When O'Neal claims in an advertisement, 'I have an open attitude towards cryptocurrency, but working with FTX made it easy for me to get started,' he conveys not just product information but also an implicit trust endorsement. For millions of ordinary consumers, they are not trusting complex blockchain technology or the risk disclosures of exchanges, but rather the 'Big Shark' O'Neal that embodies success and reliability.
The power of this model is immense. It successfully packaged a complex, high-risk financial platform into a consumer product as easily accepted as sports drinks or fast food, achieving exponential user growth. However, its inherent risks are also fatal. When FTX collapsed, the borrowed credibility also went bankrupt. Endorsers turned from sources of credibility to defendants in legal lawsuits in an instant.
The core of the plaintiff's accusation against O'Neal lies in his promotion of FTX's yield products, which the plaintiffs argue are 'unregistered securities.' O'Neal's defense of 'I was just a paid endorser' appears weak in the face of court and public opinion. When the promoted subject is a financial product directly related to the wealth of ordinary people, the line between 'endorsement' and 'investment advice' begins to blur. The conclusion of this settlement, regardless of the amount, draws a clear line for future celebrity endorsements: promoting financial products means assuming responsibilities and risks beyond those of ordinary product endorsements.
Paradigm shift: From personal endorsement to brand association, the survival path of OKX and Gate.io
The collapse of FTX did not end the cryptocurrency industry's enthusiasm for sports marketing, but it profoundly changed the rules of the game. Survivors of the post-FTX era, such as OKX and Gate.io, are practicing a more mature and cautious new marketing paradigm: shifting from personal credibility endorsement to strategic brand association.
Observing the collaboration between OKX and the McLaren F1 team, as well as the Premier League champion Manchester City football club, or Gate.io sponsoring the Serie A powerhouse Inter Milan and F1's Red Bull Racing team, we can identify the essential difference from the FTX model:
The differences in the depth and form of cooperation: OKX's logo appears prominently on McLaren racing cars, and Manchester City players' training kits also bear its logo. This is a form of brand exposure and association. OKX did not ask Norris or Haaland to face the camera and say, 'I trade with OKX; you should try it too.' What it seeks is to bind the OKX brand with concepts of speed, precision, top-tier competition, and global influence. What the audience sees is a powerful enterprise capable of sponsoring top-tier events, not a startup needing a star to endorse its credibility.
The wisdom of risk isolation: This brand association model is legally safer. The McLaren team or Manchester City club did not directly 'promote' OKX's financial products. Their relationship with OKX is that of sponsor and sponsee, rather than investment advisor and client. This largely isolates legal responsibilities arising from potential platform risks. When users choose to use OKX after seeing the logo on race cars, their decision is based more on brand recognition rather than blind trust in a specific individual.
From 'Who am I?' to 'Who am I associated with?': FTX's marketing logic is 'Trust me (O'Neal), so trust FTX.' In contrast, the logic of OKX is 'We are associated with top-tier teams (McLaren/Manchester City), so we are also top-tier.' This represents a shift from relying on individual credibility to building corporate-level credibility. The message conveyed is no longer 'We are easy to use,' but rather 'We are powerful, legitimate, and globally influential.'
Future challenges: Compliance, due diligence, and the real costs of endorsements.
The settlement case involving O'Neal serves as a wake-up call for all celebrities, athletes, and their management teams eager to enter the cryptocurrency space. In the future, any endorsement contract involving crypto products will face unprecedented scrutiny.
The necessity of due diligence: Celebrities and their teams must conduct in-depth, independent due diligence on the platforms they endorse, covering not only the company's financial status but also its compliance structure, risk controls, and whether products may be considered securities among other legally sensitive issues.
The evolution of contract terms: Future endorsement contracts will have exceptionally complex and stringent clauses regarding exemption, compensation, and insurance. The celebrity side will demand comprehensive protection for reputational and economic losses due to regulatory issues or platform failures.
The ethical dilemma of 'real use': Regulators and the public are increasingly inclined to require endorsers to 'truly use and believe in' the products they promote. For complex financial derivative platforms, requiring sports stars to genuinely understand and frequently use them is a huge challenge in itself. This makes it more likely that future celebrities will prefer to endorse technology layers (like public chains) or simpler applications (like wallets), rather than directly promoting high-risk exchanges.
In conclusion
Shaquille O'Neal's $1.8 million not only buys a settlement agreement but also serves as an expensive lesson for the entire crypto marketing industry. It marks the end of an era that relied on personal charisma for credibility arbitrage and ushers in a new phase of more mature, yet more 'traditional' brand building.
In the post-FTX era, crypto companies will have to build their credibility slowly and solidly, just like all traditional blue-chip companies, through long-term technological development, transparent operations, and strategic brand partnerships. And for those celebrities in the spotlight, when crypto companies present hefty checks, their first question may no longer be 'How much is the compensation?' but rather 'Am I ready to stake my own name on the future of this name?'
