According to Bloomberg, Bankman-Fried, the founder of FTX in 2019 and the catalyst for its bankruptcy in 2022, has agreed to collaborate in the class action lawsuit. High-profile celebrities played a significant role in promoting the crypto exchange during its peak period.
Class action attorney Adam Moskowitz initiated the lawsuit, alleging that the celebrity endorsers deceived consumers by making false claims regarding the safety of cryptocurrency assets.
The cryptocurrency exchange formerly held considerable popularity and influence, as Bankman-Fried demonstrated skill in utilizing celebrity endorsements to propel the platform’s rapid ascent.
As a result, Bankman-Fried amassed an incredible $32 billion fortune, catapulting FTX into the ranks of the world’s top three largest cryptocurrency exchanges prior to its collapse.
Following the collapse of FTX, a series of legal actions ensued, culminating in Bankman-Fried’s sentencing to 25 years in prison for his involvement in defrauding the exchange’s customers.
The ex-CEO has filed an appeal against his conviction and sentence and is presently detained at the Metropolitan Detention Center in Brooklyn, New York, awaiting transfer to prison.
These individuals are accused of endorsing unregistered securities on FTX, a charge that, if proven, could have significant legal implications for them.
FTX and Celebrities
Shaquille O’Neal received formal service of the FTX class-action lawsuit while attending an NBA game in March 2023.
The lawsuit claims that the “FTX: I Am All In” marketing campaign, which prominently showcased O’Neal, deceitfully persuaded consumers to interact with FTX, resulting in financial losses after the exchange’s collapse.
It’s reported that Tom Brady suffered a significant loss of $30 million due to the collapse of FTX, primarily comprised of shares that have now become worthless. These shares were part of his agreement with the exchange back in 2021 when he served as an “ambassador.”
Bundchen, his former spouse, is also said to have incurred losses of $18 million on failed stock investments linked to FTX.
Larry David informed The Associated Press that he incurred significant financial losses when FTX encountered difficulties. He also referred to himself as an “idiot” for seeking advice from friends who claimed to have expertise in cryptocurrency and assured him of the legitimacy of the company.
The investors involved in the legal dispute hold aspirations of recouping a portion of their losses stemming from the FTX collapse. Bankman-Fried may be able to strengthen their case against the celebrity endorsers.
Pending approval by a judge, their agreement will result in the dismissal of civil liabilities against Bankman-Fried, both presently and in the future. In return, the former CEO will furnish non-privileged documents disclosing his assets and investments, along with information regarding defendants in the civil case.
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