THE HILL | BY BRAD DRESS - 11/16/22 2:42 PM ET
A class-action lawsuit filed Tuesday against the collapsed cryptocurrency exchange FTX and its former CEO Sam Bankman-Fried names a host of celebrities, including football legend Tom Brady,comedian Larry David and basketball stars Shaquille O’Neal and Steph Curry.
The complaint was filed in the U.S. District Court in southern Florida by an FTX investor, Edwin Garrison, on behalf of other investors in the cryptocurrency exchange, whose owners are seeking bankruptcy and are liquidating the company.
The lawsuit seeks to make FTX, Bankman-Fried and the celebrities who promoted the cryptocurrency exchange “responsible for the many billions of dollars in damages” the former investors lost after the market collapsed this month through compensatory damages.
“Defendants’ misrepresentations and omissions made and broadcast around the country through the television and internet render them liable,” the lawsuit alleges of the celebrities named in the suit.
The Hill has reached out to FTX for comment.
Bankman-Fried resigned as CEO of FTX and filed for bankruptcy last week after an affiliated trading firm, Alameda Research, lost billions of dollars on risky bets.
The shocking downfall of one of the largest cryptocurrency exchanges has prompted outrage, including on Capitol Hill, where lawmakers are expected to hold a hearing on the issue next month.
As many as 1 million users who had traded and purchased assets on FTX could face losses.
The lawsuit filed on Tuesday in Miami, where FTX is headquartered, says American consumers collectively lost more than $11 billion and alleges the company organized a “fraudulent plan” to deceive customers.
The complaint alleges that FTX was built like a “house of cards” and operated by a “Ponzi scheme where the FTX Entities shuffled customer funds” around and used them to secure investments.
The celebrities named in the suit — which also includes Tennis star Naomi Osaka and retired baseball player David Ortiz — are accused of pushing consumers to invest in FTX and ultimately “pouring billions of dollars into the Deceptive FTX Platform to keep the whole scheme afloat.”
FTX was founded in 2019 and quickly became a leading crypto exchange where billions of dollars of crypto assets were traded daily.
Bankman-Fried was once worth $26 billion and was a major political donor, but his net worth reportedly plummeted after the bankruptcy filing. He has apologized for the collapse of FTX.