Tom Brady, Stephen Curry and Golden State Warriors slammed by lawsuit over FTX endorsements

FTX’s bankruptcy raised concerns among traders in the crypto community. A group of investors filed a lawsuit against celebrities Tom Brady, Stephen Curry and Golden State Warriors, an American professional basketball team, for endorsing the FTX exchange. 

Also read: FTX contagion spreads to Gemini, the exchange delays withdrawals on lending program

Celebrities and professional football team scrutinized following FTX collapse

The fall of Samuel Bankman-Fried’s (SBF) FTX exchange has resulted in scrutiny from regulators worldwide. FTX exchange’s collapse and Chapter 11 bankruptcy filing could act as the tipping point to speed up regulations in cryptocurrencies. 

SBF’s filing for Chapter 11 bankruptcy wiped out millions in user funds. FTX was the second-largest exchange by trade volume before its liquidity crisis. A group of investors have filed a lawsuit against celebrities and influencers who endorsed FTX exchange. 

The class action lawsuit is aimed at Samuel Bankman-Fried, FTX’s founder and CEO in addition to celebrities who promoted the exchange. The lawsuit alleges that Bankman-Fried and the celebrities were potentially a part of a scheme to defraud investors. It also claims that the scheme was devised to “take advantage of unsophisticated investors from around the country.” 

Leading law firm Boies Schiller Flexner LLP and the Moskowitz Law Firm brought the lawsuit to the Florida Southern District Court. The premise is that the defendants participated in the offer and sale of unregistered securities in the form of yield-bearing accounts.

Some of the celebrities named in the lawsuit are Tom Brady, Stephen Curry, former NBA star Shaquille O’Neal, Gisele Bündchen, Kevin O’Leary, and even the American basketball team, the Golden State Warriors.

The lawsuit reads:

FTX’s business was based upon false representations and deceptive conduct. Although many incriminating FTX emails and texts have already been destroyed, we located them and they are evidence of how FTX’s fraudulent scheme was designed to take advantage of unsophisticated investors from across the country.

The implosion of FTX exchange and SBF’s trading firm Alameda Research had a ripple effect on cryptocurrency exchanges and platforms in the ecosystem. Crypto lender BlockFi is considering filing for bankruptcy and crypto brokerage Genesis suspended withdrawals after FTX’s collapse.