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Many famous celebrities, including comedian Larry David and tennis star Naomi Osaka, are having their names affected after supporting the bankrupt crypto exchange FTX. Now, their cell phones can also touch them.
On Wednesday, Oklahoma man Edwin Garrison filed a class action lawsuit against FTX users, calling the company a “Ponzi scheme” and claiming that celebrities have endorsed unlicensed securities. In addition to FTX, other defendants in the suit include NFL star Tom Brady and his ex-wife Gisele Bundchen, NBA legends Steph Curry and Shaquille O’Neil, MLB’s David Ortiz and Shohei Ohtani and the Golden State Warriors.
The complaint, filed in Miami, alleges that the damages will eliminate the $5 million minimum required to bring the case to federal court, and says Garrison is seeking to represent “thousands of ” or “millions” of other consumers who bought securities in the form of bank accounts. .
The lawsuit is the latest issue since the collapse of FTX, which until 10 days ago was considered a blue-chip crypto company valued at $30 billion, but has since been found to be involved in dark accounts practices and attacks on customer accounts to work. risky investment.
While it is common for class-action lawyers to file complaints—and sometimes not—based on business problems, this can be problematic for celebrities, as the attorneys handling the case are David Boies, a great lawyer. who argued many cases before the Supreme Court.
The indictment alleges that FTX is a fraudulent scheme to defraud unscrupulous investors, and that the attorneys are recovering dozens of text messages and emails that FTX sought to destroy. Also included are photos featuring Brady, Bundchen, Curry and others inspiring FTX. Here is an example, including text from the complaint:
The legal case
Garrison is accusing FTX and celebrities of violating Florida securities and consumer protection laws and participating in a civil lawsuit. These claims, however, are based on one very important fact: The American company FTX led customers to its exchange abroad where they could buy “profitable funds” and receive rates up to 8% for sending cryptocurrencies such as Ethereum.
This is important because FTX has long stated that Americans were not allowed to transfer abroad, and prevented potential users from using it. However, Garrison claims that even though he signed up through an affiliate, an app called FTX US, and clearly identified himself as a US citizen, the app showed him ads that carried each to the free exit abroad.
“Even though I identified myself by name and address, the FTX Trading App now shows that I’m getting a profit in ETH. The profit is worth 8 percent APR,” Garrison said. . “I was able to access the profitable product after getting a link to the FTX Trading App from the FTX US website.”
This account of profitable accounts appears to be important to Garrison’s argument that FTX was an illegal Ponzi scheme—especially because it lent large profits to entice later investors to lend money. pay off previous investors.
The lawsuit also establishes that the accounts are financial, although the question of when crypto is considered safe is not settled under US law.
If a jury accepts these claims that FTX US steered clients to foreign exchanges where they traded money, the celebrities named in the suit could be in trouble. FTX has already filed for bankruptcy, a process that would see its remaining assets collected by creditors and other creditors, meaning it would have no money to pay any class-action liability—but not Brady. and others. It means deep pockets that the lawyers will target if they win in court.
The class action isn’t an open-and-shut case, and it’s possible that it’ll be settled before it ever lands in a courtroom, but the lawsuit will highlight the fate of celebrities who supports crypto.
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