Breaking News
Investing Pro 0
🙌 It's Here: the Only Stock Screener You'll Ever Need Get Started

FTX's Bankman-Fried, Tom Brady and other celebrity promoters sued by crypto investors

Published Nov 16, 2022 09:34AM ET Updated Nov 17, 2022 04:00AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: FTX CEO Sam Bankman-Fried poses for a picture, in an unspecified location, in this undated handout picture, obtained by Reuters on July 5, 2022. FTX/Handout via REUTERS/File Photo/File Photo

By Jody Godoy

(Reuters) - U.S. crypto investors sued FTX founder Sam Bankman-Fried and several celebrities who promoted his exchange including NFL quarterback Tom Brady and comedian Larry David, claiming they engaged in deceptive practices to sell FTX yield-bearing digital currency accounts.

The proposed class action filed on Tuesday night in Miami alleges that FTX yield-bearing accounts were unregistered securities that were unlawfully sold in the United States.

FTX filed for bankruptcy and is facing scrutiny from U.S. authorities amid reports that $10 billion in customer assets were shifted from FTX to Bankman-Fried's trading company Alameda Research.

At least $1 billion in client funds are missing, sources have told Reuters.

When the crypto exchange faltered on liquidity concerns, U.S. investors sustained $11 billion in damages, the lawsuit says.

The lawsuit seeks damages from Bankman-Fried and 11 athletes and other celebrities who promoted FTX, including David, the creator of "Seinfeld" and "Curb Your Enthusiasm."

David starred in a commercial for FTX that aired during the 2022 Super Bowl in which he portrayed fictional characters dismissing important innovations throughout history and ended with the message "Don't Miss Out on Crypto."

Brady, tennis star Naomi Osaka and professional basketball team the Golden State Warriors are also defendants in the lawsuit.

Representatives for Bankman-Fried, Brady, Osaka, David and the Golden State Warriors did not immediately respond to requests for comment on Wednesday.

John J. Ray III, FTX's new chief executive who is not named as a defendant in the lawsuit, declined to comment on the allegations.

The lawsuit was brought on behalf of Edwin Garrison, an Oklahoma resident who had an FTX yield-bearing account which he funded with crypto assets to earn interest, and others like him.

Garrison alleges that while FTX lured U.S. investors to its yield-bearing accounts, it was a "Ponzi scheme" where investor funds were shuffled to related entities to maintain the appearance of liquidity.

Investors and the U.S. Securities and Exchange Commission have previously gone after celebrities for deceptively touting cryptocurrencies.

Reality TV star Kim Kardashian agreed in February to pay the SEC $1.26 million to settle claims that she failed to disclose she was paid to promote EthereumMax tokens. She did not admit wrongdoing.

Private investors also have sued Kardashian and others over their roles in promoting the tokens.

Garrison cited these cases in his lawsuit, as well as a February ruling by the 11th U.S. Circuit Court of Appeals that allowed BitConnect cryptocurrency investors to sue individuals who promoted the coin online.

His lawsuit alleges Bankman-Fried and FTX promoters engaged in a conspiracy to defraud investors and violated Florida state laws requiring securities to be registered and prohibiting unfair business practices.

Sean Masson, an attorney at Scott+Scott who represents crypto investors in the EMAX case, said investors have used the Florida unfair trade law to target crypto promoters in lawsuits that are pending.

"To be successful, they are going to need to establish a deceptive act or unfair practice, and that it caused actual damages," Masson said.

FTX's Bankman-Fried, Tom Brady and other celebrity promoters sued by crypto investors
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Picaso Fish
Picaso_Fish Nov 16, 2022 11:14PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Kevin O'Leary said he would be pleased to work with sbf again. What an A#$%^ no morales, no ethics. Can not be trusted
taylor jason
taylor jason Nov 16, 2022 11:14PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
cause he likes getting f kd in the ******
First Last
First Last Nov 16, 2022 11:00AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Celebrities who promoted products/companies that failed or were fraudulent should be required to disclose that in any future endorsements.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email