The fallout from the FTX collapse continues this week.
Former Red Sox slugger David Ortiz, quarterback Tom Brady, supermodel Gisele Bündchen, and Golden State Warriors guard Stephen Curry are just some of the names that have been named in a lawsuit filed this week that alleges that the crypto platform FTX and former CEO Sam Bankman-Fried violated Florida law, misled customers and cost investors billions of dollars in damages.
The lawsuit alleges that U.S. customers sustained $11 billion in damages and accused the exchange of targeting “unsophisticated investors from across the country.”
Oklahoma resident Edwin Garrison is asking to represent a class of “thousands, if not millions, of consumers nationwide.” Garrison claims FTX used celebrities including Curry, Brady, Gisele Bundchen and Shaquille O’Neal to promote the exchange’s unregistered securities and funnel investors into a Ponzi scheme.
The suit describes the well-known celebrities as “all parties who either controlled, promoted, assisted in, and actively participated in FTX Trading and FTX US (collectively, the “FTX Entities”), offer and sale of unregistered securities in the form of yield-bearing accounts (YBAs) to residents of the United States.”
“The Deceptive and failed FTX Platform was based upon false representations and deceptive conduct,” the lawsuit reads. “Although many incriminating FTX emails and texts have already been destroyed, we located them and they evidence how FTX’s fraudulent scheme was designed to take advantage of unsophisticated investors from across the country, who utilize mobile apps to make their investments. As a result, American consumers collectively sustained over $11 billion dollars in damages.”
FTX filed for bankruptcy protection last week and it sent shockwaves through the cryptocurrency industry. Users remain in the dark about when they might get their funds back, if at all.
Garrison says he lost money after the crypto exchange was forced to stop customers from withdrawing funds.
The lawsuit states that a part of FTX’s scheme was to enlist celebrities “to raise funds and drive American consumers to invest in the YBAs” to keep the exchange afloat.
FTX’s lawyers said there were already more than 100,000 claims against the company and estimated that figure could grow to more than 1 million, most of them customers, once the case is complete.
We are not even close to this entire ordeal being over and it could drag on for several years. There are a ton of people who don’t have the funds to withstand how detrimental this is to their finances.
