Lawsuits hit a string of high-profile celebrities for endorsing and promoting the now-bankrupt FTX cryptocurrency exchange.
The list includes the likes of Tom Brady, Stephen Curry, Gisele Bundchen, Larry David, Naomi Osaka, and the Golden State Warriors.
Legal Trouble Mounts For FTX Promoters
As FTX’s sudden collapse continues to make waves in the crypto community, celebrities that endorsed the exchange have also come under scrutiny. A group of investors filed a class action lawsuit against individuals endorsing the exchange. The list includes high-profile names such as Tom Brady, Stephen Curry, Gisele Bundchen, Larry David, Naomi Osaka, and the Golden State Warriors.
According to the lawsuit, the platform targeted gullible investors through celebrity endorsements, describing the exchange as a “Ponzi Scheme.”
“FTX’s fraudulent scheme was designed to take advantage of unsophisticated investors from across the country, who utilize mobile apps to make their investments. As a result, American consumers collectively sustained over $11 billion in damages.”
Case Could Be Brought To Federal Court
The lawsuit was filed in Miami and stated that the damages clear the $5 million minimum required to bring the case in federal court. Additionally, it states that it seeks to represent thousands that brought securities in the form of interest-bearing accounts. This lawsuit is the latest fallout that resulted from the collapse of FTX, sending shockwaves in the crypto community.
Until just over a week ago, the Sam Bankman-Fried-led FTX was considered a blue-chip crypto company which was valued at $30 billion. However, it was revealed that the exchange indulged in several unethical practices, shady accounting practices, raiding customer accounts, and making extremely risky investments.
“Although many incriminating FTX emails and texts have already been destroyed, we located them.”
The case is being handled by leading law firm Boies Schiller Flexner LLP and the Moskowitz Law Firm.
Details Of The Lawsuit
The lawsuit accuses FTX and the celebrities associated with the exchange of violating Florida Securities and Consumer Protection laws and engaging in an illegal civil conspiracy. The claims rely on a significant point, which is that FTX.US intentionally steered users to its overseas exchange where they could purchase “yield-bearing accounts” and avail of interest rates going up to 8% for lending assets such as ETH.
This point is significant because FTX has consistently maintained that American citizens were not allowed on the overseas exchange. It also stated that it actively prevented potential users from using the exchange. However, Edwin Garrison, one of the individuals that filed the lawsuit, claimed that he signed up to FTX US and identified himself as a US citizen. However, the application still showed him advertisements redirecting him to the overseas exchange.
“Despite the fact I identified myself by name and address, the FTX Trading App now shows that I am earning yield on the ETH. The yield is valued at 8 percent APR. I was able to access the yield-earning product after following a link to the FTX Trading App from FTX US’s website.”
Warriors Pause All FTX-Related Promotions
The Golden State Warriors, who had frequently shown in-arena ads for FTX, announced that they were halting all FTX-related promotions in the wake of the collapse. The reigning champions added that a Jordan Poole bobblehead given to 10,000 fans during Monday’s game was the last FTX promotion.
Others who endorsed FTX include actor Stephen Curry, NFL superstar Tom Brady and his then-wife Gisele Bundchen who featured in a nationwide ad campaign for the exchange.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.