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NBA champion Golden State Warriors are sued over FTX collapse

Published 11/21/2022, 10:59 AM
Updated 11/21/2022, 01:46 PM
© Reuters. FILE PHOTO: Representations of cryptocurrencies are seen in front of displayed FTX logo in this illustration taken November 10, 2022. REUTERS/Dado Ruvic/Illustration

(Reuters) -The Golden State Warriors were sued on Monday by an FTX customer who accused the reigning National Basketball Association champions of fraudulently promoting the now-bankrupt cryptocurrency exchange.

Elliott Lam, a Canadian citizen and Hong Kong resident, filed his proposed class-action lawsuit in San Francisco federal court on behalf of "thousands, if not millions" of people outside the United States who traded on FTX's platform.

Other defendants include Sam Bankman-Fried, who founded FTX, and Caroline Ellison, who led Bankman-Fried's trading firm Alameda Research.

The Warriors last December had named FTX its official cryptocurrency platform, in what it called a first-of-its-kind cryptocurrency partnership in professional sports.

Lam accused the defendants of falsely representing that FTX was a "viable and safe way to invest in crypto," in order to deceive people into investing there.

The lawsuit seeks damages under California consumer laws for customers outside the United States with FTX yield-bearing accounts. Lam said he lost $750,000 in his account.

A Warriors spokeswoman said the team does not discuss pending legal matters. Lam's lawyers did not immediately respond to requests for additional comment.

The Warriors are also a defendant in a Nov. 16 lawsuit in Miami by U.S.-based FTX customers seeking damages from celebrity endorsers like Warriors guard Stephen Curry, quarterback Tom Brady, comedian Larry David and tennis player Naomi Osaka.

Last week, the Warriors paused promotions related to FTX, according to published reports.

© Reuters. FILE PHOTO: Oct 23, 2022; San Francisco, California, USA; Golden State Warriors championship banners hang above the court during the third quarter against the Sacramento Kings at Chase Center. Mandatory Credit: Darren Yamashita-USA TODAY Sports

Another NBA team, the Miami Heat, on Nov. 11 said it would drop the FTX name from its arena and seek a new naming sponsor.

FTX filed for Chapter 11 protection on the same day. The Heat is not a defendant in the Miami lawsuit.

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