Former FTX Trading CEO Sam Bankman-Fried, NFL quarterback Tom Brady, supermodel Gisele Bundchen and comedian Larry David are among a celebrity-studded list of people accused of defrauding investors who lost money in the ‘cryptocurrency exchange
A class-action lawsuit filed in Florida federal court on Tuesday names those four, along with other athletes and entertainers, as defendants in the case. All promoted FTX, one of the world’s largest cryptocurrency trading platform exchanges before filing for bankruptcy on Nov. 11, with the company now under investigation for possible securities violations.
“It’s still very difficult to comprehend that a single company has defrauded consumers of more than $11 billion, all from our backyard here in Miami,” Adam Moskowitz, the attorney who led the class action, said in an email. . The lawsuit seeks unspecified damages and is the first filed against Bankman-Fried and its companies since FTX filed for bankruptcy protection.
As part of a $20 million ad campaign, Brady and Bundchen in 2021 filmed a commercial called “FTX. You In?” showing them telling acquaintances to join the FTX platform, according to the complaint, filed in Miami on behalf of Oklahoma resident Edwin Garrison and seeking to represent “thousands, if not millions, of consumers nationwide.”
This involves US investors who signed up for Yield FTX crypto accounts, which the lawsuit says created unregistered securities that are illegal in Florida and the US
The lawsuit alleges that FTX deployed celebrities to advertise the exchange and drive them into a Ponzi scheme.
David, the creator of ‘Seinfeld’ and ‘Curb Your Enthusiasm’ was featured in an ad for FTX titled ‘Don’t Miss Out on Crypto’ which aired during the 2022 Super Bowl. The ad is the only commercial of the Super Bowl where David appeared and showed him skeptical of historical inventions like the wheel, the light bulb and of course FTX.
Other current and former athletes named to the suit are NBA star Stephen Curry; NFL quarterback William Trevor Lawrence; baseball player Shohei Ohtani; tennis player Naomi Osaka; and broadcaster and former basketball player Shaquille O’Neal. “Shark Tank” host Kevin O’Leary is also named in the complaint, which was filed Nov. 15 in the Southern District of Florida.
The exchange has shuffled client money between affiliated entities, using funds and loans from new investors to pay interest to old ones in an effort to “maintain the appearance of liquidity,” Moskowitz said, adding that FTX used public figures to give the operation an air of credibility.
“FTX was a PR and marketing genius and knew that such a massive Ponzi scheme – bigger than the Madoff scheme – could only succeed with the help and promotion of the most famous, respected and loved celebrities and influencers in the world ,” he said.
FTX did not respond to a request for comment.
FTX’s creditors will be the first to get any assets a bankruptcy judge sees fit to distribute as the company seeks to restructure as part of its. Investors in the Bahamas-based firm, which had raised about $2 billion in venture capital, come next.
This means that FTX account holders, who have used the platform to trade bitcoin, ethereum and other digital currencies, may have to wait yearsk – if they ever will.