The stunning collapse of FTX, one of the leading cryptocurrency exchanges on the planet, has now landed in a federal court, in a proposed class-action lawsuit filed in the Southern District of Florida against Sam Bankman-Fried and FTX.
And the lawsuit implicates a quantity of sports activities figures, including Tom Brady, Steph Curry, Trevor Lawrence, Shaquille O’Neal, and the Golden State Warriors as defendants.
Attorney Adam Moskowitz, who along with attorneys David Boies and Stephen Neal Zack filed the class action on behalf of an Oklahoma resident, alleges in a 41-page complaint that FTX was a “home of cards,” seeking to target “unsophisticated investors” using film star endorsers such as Curry, Brady, O’Neal, and others.
The complaint was filed on behalf of Oklahoma resident Edwin Garrison, who’s seeking to be the named plaintiff and characterize the “thousands, if no longer thousands and thousands, of patrons nationwide” who have been influenced to invest in yield-bearing FTX crypto accounts. In the complaint, it is alleged that these accounts constitute unregistered securities, in violation of each Federal laws, as successfully as local Florida laws.
Four counts are alleged in the complaint: Violations of the Florida Securities and Investor Protection Act; Violations of the Florida Inaccurate and Unfair Trade Practices Act; Civil conspiracy; and a ask for Declaratory Judgment against the Defendants.
The complaint outlines all the FTX “home of cards” as follows:
The Inaccurate FTX Platform maintained by the FTX Entities was essentially a home of cards, a Ponzi way where the FTX Entities shuffled buyer funds between their opaque affiliated entities, using current investor funds obtained via investments in the YBAs [yield-bearing accounts] and loans to pay interest to the archaic ones and to attempt to maintain the appearance of liquidity.
Part of the way employed by the FTX Entities involved utilizing some of the greatest names in sports activities and entertainment—savor these Defendants—to raise funds and pressure American patrons to invest in the YBAs, that have been offered and offered largely from the FTX Entities’ domestic base of operations here in Miami, Florida, pouring billions of dollars into the Inaccurate FTX Platform to retain the entire way afloat.
What goal did Brady and the alternative defendants play in this myth? According to the complaint:
Part of the way employed by the FTX Entities involved utilizing some of the greatest names in sports activities and entertainment—savor these Defendants—to raise funds and pressure American patrons to invest in the YBAs, that have been offered and offered largely from the FTX Entities’ domestic base of operations here in Miami, Florida, pouring billions of dollars into the Inaccurate FTX Platform to retain the entire way afloat.
Beyond Bankman-Fried and FTX, these individuals or teams have been named as Defendants, who according to the complaint helped by “funneling investors into the FTX Ponzi way, and to promote and substantially assist in the sale of the YBAs:”
Tom Brady and Gisele Bundchen;
Kevin O’Leary, also known as “Mr. Graceful;”
Udonis Haslem;
David Ortiz;
Steph Curry;
Golden State Warriors;
Shaquille O’Neal;
Trevor Lawrence;
Shohei Ohtani;
Naomi Osaka; and,
Larry David
In the complaint, advertisements on behalf of these defendants are highlighted, including the fact that the Warriors entered into an agreement with FTX to name the platform their “Official Crypto Platform and NFT Marketplace.” This included placing the FTX logo on the court at the Chase Heart.
With appreciate to Brady and Bundchen, the complaint highlights their television add, described as part of FTX’s “$20-million ad campaign.” In the commercial, they have been viewed telling acquaintances to join the platform.
Regarding Curry, the complaint highlights his “nationwide ad campaign pushing the Inaccurate FTX Platform, known as the ‘#notanexpert’ campaign.” Furthermore, the complaint outlines how Curry’s ad campaign for FTX ended in his statement that “I’m no longer an knowledgeable, and I don’t must aloof be. With FTX I have everything I want to steal, sell, and trade crypto safely.” (Emphasis in original).
Osaka’s involvement with FTX is outlined as successfully, including the fact that Osaka wore the FTX logo at a quantity of tournaments, including the 2022 Miami Begin. The complaint points out an FTX ad that featured her “competing in a comical strip,” and ended with this statement from her: “I’m Naomi Osaka and I’m proud to partner with FTX. Making cryptocurrency accessible is a goal that FTX and I are striving towards.”
With appreciate to all these defendants, it is alleged that these individuals or teams became brand ambassadors for the company, “driving retail user adoption of the Inaccurate FTX Platform.” Furthermore, it is alleged that “Defendants’ misrepresentations and omissions made and broadcast around the nation via the television and internet render them liable to Plaintiff and class members for soliciting their purchases of the unregistered YBAs.”
The proposed class action suit seeks an unspecified amount of damages, including “actual, snarl and compensatory damages” as successfully as “restitution and disgorgement of revenues if warranted.”
