Disgraced FTX CEO Sam Bankman-Fried and a long list of celebrities who endorsed the now-defunct cryptocurrency exchange FTX, have been named in a class action lawsuit filed on Tuesday in Miami, Florida.
The lawsuit names a number of prominent athletes and sporting teams, including NFL legend Tom Brady, fashion model Giselle Bundchen, The Golden State Warriors, NBA stars Shaquille O’Neal and Steph Curry, as well as “all parties who either controlled, promoted, assisted in, and actively participated in promoting the sale of FTX’s financial products.”
The lawsuit claims that FTX was “based upon false representations and deceptive conduct” and used celebrity endorsements to “take advantage of unsophisticated investors”. The document additionally alleges that “American consumers collectively sustained over $11 billion dollars in damages.”
At the time of writing, roughly one million people who traded assets on FTX look set to face a loss of some kind.
The central claim of the lawsuit is that FTX and the long list of celebrity endorsers are to be held “responsible for the billions of dollars in damages” it caused to investors following the revelation that the exchange would be filing for bankruptcy.
Other notable names listed in the lawsuit were Tennis star Naomi Osaka, prominent businessman “Mr Wonderful” aka Kevin O’ Leary and retired baseball player David Ortiz.
The complaint was filed in the US District Court in Southern Florida by FTX investor Edwin Garrison, who claimed that he funded his account with a “sufficient amount of crypto assets to earn interest on his holdings”, but only did so after being exposed to “misrepresentations and omissions” from the list of famous names provided.
FTX punished by regulators around the world
FTX, which is headquartered in the Bahamas, is currently being investigated by the nation’s Securities Commission. In a statement to Reuters, the Royal Bahamas Police Force declared the following:
“In light of the collapse of FTX globally and the provisional liquidation of FTX Digital Markets, a team of financial investigators from the Financial Crimes Investigation Branch are working closely with the Bahamas Securities Commission to investigate if any criminal misconduct occurred.”
Closer to home, FTX Australia has also come under the regulatory spotlight with the Australian Securities and Investment Commission (ASIC) suspending the company’s financial services licence until May 15 next year. More than 30,000 Australians were caught in the crossfire, and local administrators are working to recover what funds they can.
FTX was once the world’s fourth largest cryptocurrency exchange with an estimated value of US$32 billion. However, it suffered a stunning collapse after it was revealed that the exchange had been artificially inflating its value alongside using customer funds to finance its own trading activities.