The complaint, which was filed late on Tuesday, claimed that because these celebrities gave the platform instant credibility, they are equally responsible for its bankruptcy as the platform’s founder.
A class-action complaint against cryptocurrency exchange FTX names celebrities including NFL player Tom Brady and comedian Larry David and accuses them of being responsible for endorsing the defunct company.
One of the largest cryptocurrency exchanges in the world, FTX, filed for bankruptcy last week. This was a startling turn of events for a company that had once been valued at $32 billion.
State and federal authorities are looking into the Bahamas-based business and its founder, Sam Bankman-Fried, for allegedly using depositors’ money without their consent.
Before the business failed, FTX had a reputation for using well-known people to advertise its goods.
Additionally, it had the name rights to a Miami sports stadium and a Formula One racing team.
Its commercials included David, the creator of Seinfeld, Brady, the star quarterback of the Tampa Bay Buccaneers, Shaquille O’Neal and Stephen Curry from basketball, and Naomi Osaka from tennis.
The lawsuit, which was submitted late on Tuesday, said that because these celebrities gave the platform instant legitimacy, they are just as accountable as Mr. Bankman-Fried.
Celebrities helped keep the “scheme afloat”
It’s not the first time a famous person has been victimized by bitcoin advertising. Kim Kardashian agreed to pay $1.26 million (£1.12 million) in October to resolve claims relating to an Instagram post.
The reality TV actress omitted the fact that she had received a payment of $250,000 (£220,000) in exchange for advertising a bitcoin asset on her feed.
According to the lawsuit, “the FTX Entities employed a scheme that included using some of the biggest names in sports and entertainment, like these defendants, to raise money and motivate American consumers to invest… pouring billions of dollars into the deceptive FTX platform to sustain the entire scheme.”
Adam Moskowitz, a class-action attorney, filed the claim in Florida’s southern district.
The victim’s legal counsel in the state’s residential tower collapse is Mr. Moskowitz.
Very grave allegations
The crisis has created more uncertainty on how cryptocurrencies and other digital assets should be regulated.
The Financial Services Committee of the US House of Representatives stated it anticipates hearing from Mr. Bankman-Fried, who currently faces potential civil and criminal prosecution.
According to committee chairwoman Maxine Waters, “the collapse of FTX has posed tremendous harm to over one million users, many of whom were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it all disappear in a matter of seconds.”
The deputy prime minister and finance minister of Singapore stated that there are “very serious allegations that amount to potential fraud” regarding the demise of the FTX exchange.
The city-perspective state that they were “on the right track” in focusing on the innovation of digital assets, while simultaneously taking a hard stance against crypto speculation and trading by individual investors, which was reinforced by recent developments in the cryptocurrency market, according to Lawrence Wong.
As FTX teetered on the verge of bankruptcy, Bitcoin and other cryptocurrencies suffered a blow.