FTX founder Sam Bankman-Fried and several celebrities are being sued in a class action that seeks to recover damages following the company’s dramatic collapse.
Oklahoma resident Edwin Garrison filed a complaint on Tuesday in Florida federal court. In the complaint, Garrison notes that the class-action lawsuit could involve thousands “if not millions” of consumers nationwide who were enrolled in yield-bearing cryptocurrency accounts with FTX, which Garrison contends constitute unregistered securities.
“The Deceptive and failed FTX Platform was based upon false representations and deceptive conduct,” the suit reads, adding that FTX’s “fraudulent scheme was designed to take advantage of unsophisticated investors from across the country, who utilize mobile apps to make their investments.”
In addition to Bankman-Fried, the defendant is also targeting Tom Brady, Gisele Bundchen, Stephen Curry, the Golden State Warriors, Shaquille O’Neal, Udonis Haslem, David Ortiz, William Trevor Lawrence, Shohei Ohtani, Naomi Osaka, Larry David, and Kevin O’Leary.
In the complaint, the plaintiff asserts that the celebrities he listed are also liable because they “promoted, assisted in, and actively participated” in the alleged scheme. He said the defendants “aggressively marketed” the FTX platform.
“FTX were geniuses at public relations and marketing and knew that such a massive Ponzi scheme larger than the Madoff scheme could only be successful with the help and promotion of the most famous, respected, and beloved celebrities and influencers in the world,” said Adam Moskowitz, the attorney who filed the suit, in a statement provided to the Washington Examiner.
In the complaint, Garrison includes screengrabs from ads featuring the celebrities alongside text explaining their involvement with the cryptocurrency company, once valued in the tens of billions of dollars.
“Defendant Shaquille O’Neal, former professional NBA basketball star, sports analyst, and entrepreneur, also became an FTX ambassador, stating in a video posted on FTX’s Twitter account that ‘I’m excited to be partnering with FTX to help make crypto accessible for everyone. I’m all in. Are you?’” one paragraph reads.
The lawsuit comes after the sudden and unexpected downfall of Bankman-Fried and FTX.
FTX announced it was entering voluntary Chapter 11 proceedings on Friday morning after a week that saw the company, one of the largest in the digital asset sphere, essentially collapse, roiling the markets. Bankman-Fried, a top donor to Democrats in the 2022 midterm elections, also announced his resignation.
FTX’s collapse began last week when the company faced a loss in confidence that culminated with Bankman-Fried’s rival, Changpeng Zhao’s Binance, moving in to buy the company.
Further causing turmoil in the cryptocurrency market, Binance then decided to pull out of the deal after Bankman-Fried withheld the company’s U.S. operation from the acquisition, leading quickly to the company’s bankruptcy. Bankman-Fried took to Twitter on Thursday to apologize for the company’s sudden and ugly fall from grace.
