FTX, a Bahamas-based cryptocurrency exchange, collapsed, and the celebrities who promoted the company are now facing a lawsuit. Based on the reports, they may be held responsible for some damages related to the crypto firm.
According to Bloomberg, popular sports superstars Tom Brady, Stephen Curry, and Shaquille O’Neal were named in the lawsuit against the bankrupt FTX for their promotion of the company’s products and services. Other celebrities, such as Kevin O’Leary, were also sued for the same reason.
In the lawsuit filings, the celebrities were accused of luring inexperienced and guileless investors into the mess. Experts in the legal field said that they were sued because they are prominent figures who are also wealthy, and this fact makes them a target for investors who want to get back some of their losses since FTX’s founder, Sam Bankman-Fried, is already broke.
Earlier this month, FTX and its affiliates filed for bankruptcy protection, so they are safe from lawsuits. However, it is different with promoters who are not in bankruptcy court. They do not have such protection; thus, the investors are going after them instead.
Since FTX’s collapse, three lawsuits were already filed in court, and one is representing thousands of consumers across the country. Brady and his ex-wife Gisele Bundchen are among the major names in the defendants’ list alongside Curry, O’Neal, O’Leary, Miami Heat’s Udonis Haslem, tennis champ Naomi Osaka, Jaguars quarterback Trevor Lawrence, MLB hitter David Ortiz, and actor Larry David.
In the civil complaint that was filed in the U.S. District Court for the Southern District of Florida, the plaintiffs said these FTX endorsers must be held accountable. The suit stated that the celebrities are “parties who either controlled, promoted, assisted in, and actively participated in FTX Trading and FTX US, offer and sale of unregistered securities in the form of yield-bearing accounts (YBAs) to residents of the United States.”
Shane Seppinni, who is representing the plaintiffs, said that “The celebrities’ liability hinges mainly on whether the products they promoted are securities.” If this is the case, “then the celebrities who promoted them could be on the hook for big damages.”
Meanwhile, former US Securities and Exchange Commission’s Office of Internet Enforcement chief, John Reed Stark, said that the lawsuit against celebrities would definitely bring about tons of money as he believes all of them will choose to settle.