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    Larry David and Tom Brady are among the named celebrities in the FTX lawsuit

    Tanya Sharma
    Nov 17, 2022 13:46
    "FTX's deceptive plan was designed to take advantage of inexperienced investors," it was also well known that FTX utilized prominent Hollywood and sports celebrities to advertise its wares.
    Larry David and Tom Brady are among the named celebrities in the FTX lawsuit
    Source: Unsplash

    FTX accused of breaking Florida law

    FTX, a cryptocurrency platform, and its former CEO Sam Bankman-Fried are accused of breaking Florida law, misleading clients, and defrauding investors out of billions of dollars in a class-action lawsuit filed on November 15 in Miami.

    Regulators investigated the accounts that many cryptocurrency companies, including FTX, offered to give users a return on money held on their platforms.

    BlockFi, a different cryptocurrency platform, settled charges with the Securities and Exchange Commission early this year by paying a $100 million fee to resolve the matter (YBAs)

    A class action lawsuit named several good persons who backed FTX

    Along with these individuals, the complaint also targets Golden State Warriors player Stephen Curry, billionaire Kevin O'Leary, and ex-wife of Tampa Bay Buccaneers quarterback Tom Brady, supermodel Gisele Bündchen.

    All of these parties "controlled, promoted, assisted in, and actively participated in" West Realm Shires Services Inc. and FTX Trading LTD.

    FTX attempted to destroy evidence of its criminal activities

    According to the lawsuit, FTX allegedly made an effort to delete embarrassing emails, messages, and other records of its illegal behavior.

    Evidence found, however, points to the fact that "FTX's fraudulent plan was meant to take advantage of naïve investors from throughout the country, who use mobile apps to make their transactions."

    Garrison filed the lawsuit in the U.S. District Court 

    The lawsuit accuses the exchange of preying on "unsophisticated investors from around the country" and claims that U.S. consumers suffered $11 billion in damages.

    Investor Edwin Garrison filed the lawsuit in U.S. District Court for the Southern District of Florida, alleging that he bought an unregistered security under the guise of a "yield-bearing account."

    Garrison claims he lost money as a result of the cryptocurrency exchange being compelled to halt customer withdrawals.

    Garrison, an Oklahoma resident, is accused in the lawsuit of putting his trust in the business "after being exposed to some or all of Defendants' misrepresentations and omissions regarding the Deceptive FTX Platform... and executed trades on the Deceptive FTX Platform in reliance on those misrepresentations and omissions."

    Consequently, it states, "Plaintiff Garrison has suffered damages for which Defendants are liable."

    Larry David also mentioned in the case

    Larry David, the star of "Curb Your Enthusiasm," who appeared in a Super Bowl ad for FTX, is also mentioned in the case.

    In this case, the Golden State Warriors are also mentioned because they collaborated with FTX this year and unveiled the company's emblem on the floor at the Chase Center, where the team plays.

    The lawsuit is yet another setback for the troubled business

    Bankman-Fried resigned as CEO last week, and FTX disclosed that it had filed for Chapter 11 bankruptcy, which enables a corporation to reorganize and continue operating while it develops a strategy to pay back its creditors.

    FTX is now under investigation by the Securities and Exchange Commission and Justice Department.

    SBF may be extradited to the United States for questioning, according to reports that US authorities have started cooperating with Bahamas law enforcement.

    FTX is the subject of an inquiry in the Bahamas where FTX’s subsidiary Digital Markets and company executives including SBF are based. 

    An investigation into the exchange has also been opened by Turkish financial authorities.

    Related: Australian authorities suspended FTX Australia's license to recompense 30,000 investors

    Takeaways

    The bankruptcy would be handled with the utmost thoroughness and transparency, John J. Ray, the new CEO of FTX Group, assured "every employee, customer, creditor, contract party, stockholder, investor, governmental authority and another stakeholder."