A class action lawsuit has been filed in the US against FTX and all those who promoted it.
This is revealed by Reuters, which reports that several US clients of FTX have sued both FTX founder Sam Bankman-Fried (SBF) and several celebrities involved in promoting the exchange.
The celebrities involved in the class action against FTX
Prominent among these is the name of Tom Brady, legendary NFL quarterback and winner of seven SuperBowls, the last of which was last year.
Tom Brady is by far one of the most celebrated sportsmen in the US and a true myth of American football.
In 2021, Brady invested in FTX, and began to promote it openly and publicly.
Another celebrity involved is actor Larry David, used by FTX among others for the actual commercial aired during this year’s Super Bowl.
David is famous, not only for starring in several films, but especially for being the co-creator of the popular sitcom Seinfeld, and for being the creator and star of the series Curb Your Enthusiasm.
Another celebrity involved is Japanese tennis player Naomi Osaka, accused of promoting FTX, as well as the entire Golden State Warriors professional basketball team.
The Warriors, who are based in California near Silicon Valley, are the defending NBA champions, and their ranks include one of modern basketball’s biggest stars, namely Stephen Curry.
SBF had plenty of contacts in Silicon Valley, so it is not surprising that they also had them with the Golden State Warriors.
Gisele Bündchen, Tom Brady’s wife, Shaquille O’Neal and Kevin O’Leary are also apparently involved. According to some unconfirmed rumors, Anthony Pompliano is also likely to be involved.
Allegations fueling class action lawsuit against FTX
The lawsuit was filed by an Oklahoma resident, Edwin Garrison, who had an interest-bearing FTX account that he funded with cryptocurrency to earn interest. Garrison is being joined by several other former clients of the exchange.
The charge by Garrison’s lawyers is that FTX was actually a pyramid scheme, which is absolutely prohibited by law, because investors’ funds were transferred to other related entities to maintain the appearance of being liquid.
Those who promoted this type of investment are also charged for this.
The service under indictment therefore is not the crypto exchange that allowed the buying and selling of cryptocurrencies, but one that promised to pay interest to those who invested cryptocurrencies.
To be precise, the charge against the celebrities is that they used deceptive practices to sell the service of FTX’s digital currency interest-bearing accounts. They are also accused of advertising unregistered securities without proper approvals.
Past promotions
This is not the first time that celebrities in the US have been sued for promoting cryptocurrencies.
Some time ago Kim Kardashian agreed to pay $1.26 million to the SEC to settle the case against her that accused her of failing to disclose that she was paid to promote EthereumMax tokens.
There have also been other celebrities who have come under the SEC’s magnifying glass, often precisely because they were accused of promoting investments without proper approvals.
In fact, in order to legally promote an investment that promises financial returns, it is first necessary to have the prospectus approved by the SEC. Without such approval, any promotion of such investments turns out to be illegal.
The lawsuit
The class action is being led by attorney Adam Moskowitz, who said:
“It is still very difficult to comprehend that just one company defrauded more than $11 billion dollars from consumers, all from our backyard here in Miami.”
Miami is by far the closest large US city to the Bahamas, where the exchange was based. As the crow flies, it is only 200 miles from Nassau, where FTX’s headquarters is located.
The proposed class action was filed Tuesday specifically in Florida federal court.
The plaintiffs allege that FTX’s US customers suffered $11 billion in damages, and that the exchange targeted precisely “unsophisticated investors” with the aim of convincing them to invest in their financial products.
