US Lawsuit Launched Against FTX Founder And Celebrity Backers

November 17, 2022 TH Author headline,bank,usa,fraud,cryptopgraphy

A class action lawsuit has been launched against FTX’s former chief executive Sam Bankman-Fried over the crypto exchange’s collapse which also names as defendants a host of its celebrity backers including Larry David, Naomi Osaka, Gisele Bündchen and Shaquille O’Neal.

Filed in Florida by class action attorney Adam Moskowitz, the case is one of the first to attempt to hold the sports stars and entertainers who promoted cryptocurrencies in the boom years responsible for their support.

As well as naming Bankman-Fried as a personal defendant, the case pulls in as co-defendants a host of names who it claims “either controlled, promoted, assisted in, [or] actively participated in FTX Trading”.

They include: comedian Larry David; Japanese tennis star Naomi Osaka; the married couple Gisele Bundchen and Tom Brady and his fellow NFL star Trevor Lawrence; basketball players Shaquille O’Neal, Steph Curry, Udonis Haslem and the Golden State Warriors; baseball players Shohei Ohtani and David Ortiz; and celebrity investor Kevin O’Leary.

The lawsuit claims: “The Deceptive FTX Platform maintained by the FTX Entities was truly a house of cards, a Ponzi scheme where the FTX Entities shuffled customer funds between their opaque affiliated entities, using new investor funds obtained through investments in the YBAs and loans to pay interest to the old ones and to attempt to maintain the appearance of liquidity.

“Part of the scheme employed by the FTX Entities involved utilising some of the biggest names in sports and entertainment – like these Defendants – to raise funds and drive American consumers to invest in the [yield-bearing accounts], which were offered and sold largely from the FTX Entities’ domestic base of operations here in Miami, Florida, pouring billions of dollars into the Deceptive FTX Platform to keep the whole scheme afloat.”

As the FTX empire has collapsed, the company’s celebrity spokespeople have scrambled to distance themselves from the company. Brady, a star NFL quarterback who was one of FTX’s most prominent supporters, has deleted a number of friendly tweets tagging in Bankman-Fried from the company’s Crypto Bahamas conference, at which the the former FTX chief executive interviewed Tony Blair and Bill Clinton.

The company also sponsored the home court for the Miami Heat basketball team, renaming it the FTX Arena. In the last week, the team announced it would be terminating its relationship with the crypto exchange, calling the news “extremely disappointing”.

David appeared in a series of commercials for FTX, in which he, in the role of his loosely fictionalised counterpart from the sitcom Curb Your Enthusiasm, rejected crypto investment opportunities. The adverts’ tagline was “don’t be like Larry”.