The Golden State Warriors, Shaquille O’Neal and Tom Brady are among a number of celebrities sued for promoting failed cryptocurrency exchange, FTX.
Filed in Florida by class action attorney Adam Moskowitz, the case is one of the first to attempt to hold the sports stars and entertainers who promoted cryptocurrencies in the boom years responsible for their support.
The class-action lawsuit argues that their celebrity status made them culpable for promoting the firm’s failed business model.
FTX has been in the public eye for more than a week, after the third-largest cryptocurrency exchange ended up with billions of dollars worth of losses and had to seek bankruptcy protection.
As well as naming CEO Sam Bankman-Fried as a personal defendant, the case pulls in as co-defendants a host of names who it claims “either controlled, promoted, assisted in, [or] actively participated in FTX Trading”.
The celebrities listed include: comedian Larry David; Japanese tennis star Naomi Osaka; the married couple Gisele Bundchen and Tom Brady and his fellow NFL star Trevor Lawrence; basketball players Shaquille O’Neal, Steph Curry, Udonis Haslem and the Golden State Warriors; baseball players Shohei Ohtani and David Ortiz; and celebrity investor Kevin O’Leary.
Bankman-Fried and FTX are under investigation by state and federal authorities for allegedly investing depositors funds in ventures without their approval.
Before its failure, FTX was known to use high-profile Hollywood and sports celebrities to promote its products. It had the naming rights to a Formula One racing team as well as a sports arena in Miami. Its commercials featured “Seinfeld” creator David, as well as Brady, the star quarterback of the Tampa Bay Buccaneers, basketball players Shaquille O’Neal and Stephen Curry, and tennis star Naomi Osaka.
The lawsuit claims: “The Deceptive FTX Platform maintained by the FTX Entities was truly a house of cards, a Ponzi scheme where the FTX Entities shuffled customer funds between their opaque affiliated entities, using new investor funds obtained through investments in the YBAs and loans to pay interest to the old ones and to attempt to maintain the appearance of liquidity.
“Part of the scheme employed by the FTX Entities involved utilising some of the biggest names in sports and entertainment – like these Defendants – to raise funds and drive American consumers to invest in the [yield-bearing accounts], which were offered and sold largely from the FTX Entities’ domestic base of operations here in Miami, Florida, pouring billions of dollars into the Deceptive FTX Platform to keep the whole scheme afloat.”
The lawsuit filed late Tuesday alleges that these sports and TV celebrities brought instant credibility to FTX, and should be held just as culpable as Bankman-Fried.
As the FTX empire has collapsed, the company’s celebrity spokespeople have scrambled to distance themselves from the company.
Brady, a star NFL quarterback who was one of FTX’s most prominent supporters, has deleted a number of friendly tweets tagging in Bankman-Fried from the company’s Crypto Bahamas conference, at which the the former FTX chief executive interviewed Tony Blair and Bill Clinton.