In addition to the conduct of Defendant Sam Bankman-Fried, as described in this Complaint, some of the biggest names in sports and entertainment have either invested in FTX or been brand ambassadors for the company,” states the jury trial seeking complaint filed today in federal court in Florida by Edwin Garrison on behalf of all “American consumers” who “collectively sustained over $11 billion in damages” from FTX’s recent crash.
In the case of Curry, the NBA legend revealed in another tongue-in-cheek television advertisement that he did not know anything about cryptocurrency. He said, addressing the camera, “I don’t need to be. With FTX, I have everything I need to properly purchase, sell, and exchange cryptocurrencies.”
Perhaps not so much now that he and the others must seek legal counsel.
The extensive use of celebrities persuaded consumers to pay “billions of dollars into the false FTX platform to keep the entire scheme afloat,” according to the complaint by attorney Adam Moskowitz and an army of lawyers. “The Deceptive FTX Platform maintained by the FTX Entities was truly a house of cards, a Ponzi scheme in which 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 in an attempt to maintain the appearance of liquidity,” the report continues, getting to the larger point.
Here is where it could become tricky for the celebrities who have donated their name and image to FTX.
“Importantly, although Defendants disclosed their partnerships with the FTX Entities, they have never disclosed the nature, scope, and amount of compensation they personally received in exchange for the promotion of the Deceptive FTX Platform, which the SEC has explained would be a violation of the anti-touting provisions of the federal securities laws,” the filing explains. In addition, none of these defendants conducted any due diligence prior to marketing these FTX goods to the general public.
The Bahamas-based cryptocurrency exchange FTX and its business cousin crypto trader Alameda Research filed for Chapter 11 bankruptcy protection last week. The severe meltdown of the world’s third-largest crypto exchange occurred as a result of Bankman-Fried and other executives’ inability to attract more investors to help stave off billions and billions of dollars in losses caused by uncertainties in the company’s business strategy and asset management. Probably didn’t help that the FTC, DOJ, and others are investigating FTX for shifting investors’ funds without permission.
Citing recent verdicts and fines against Kim Kardashian and ex-Boston Celtic Paul Pierce for non-disclosure of endorsement fees, the complaint seeks unspecified actual, direct, and compensatory damages that, based on the customer base FTX attracted, might exceed nine figures.
Without a doubt, all of the major names will retain top-tier attorneys to assist them in this matter. However, they may have to flip through the Rolodex a bit more than normal, as celebrity attorney David Boies is actually representing Garrison in this case.