What Do Tom Brady, Steph Curry and Naomi Osaka Have in Common? An FTX Lawsuit.

Gisele Bundchen and Shaquille O’Neal were also named in the suit

article-image

Blockworks exclusive art by axel rangel

share

What appears to be the first class action lawsuit filed against FTX and a number of its high-profile backers claims the insolvent crypto exchange violated Florida law and is demanding $11 billion in damages on behalf of its customers. 

Adam Moskowitz — the attorney who filed the lawsuit on behalf of Oklahoma resident Edwin Garrison and related counterparties in the Southern District of Florida — said FTX’s founder and former chief executive, Sam Bankman-Fried orchestrated “massive fraud” in improperly trading customer funds. 

Defendants include the following: Tom Brady, Gisele Bundchen, Stephen Curry, the Golden State Warriors, Shaquille O’Neal, Udonis Haslem, David Ortiz, William Trevor Lawrence, Shohei Ohtani, Naomi Osaka, Lawrence Gene David and Kevin O’Leary.

All are allegedly “responsible for the many billions of dollars in damages.”

Using “the largest and most well-known marketers and celebrities was the only way that this massive fraud could have been successful,” Moskowitz said. 

The legal action’s chance of succeeding, however, isn’t yet known. Representatives for the defendants declined to comment, did not immediately return requests for comment or could not be reached.

Added Moskowitz: “Regular people on the street that have smartphones needed to hear from somebody [who] they very much respect in order to make this decision to go ahead and buy something they’ve never heard of.”

Brady and Curry were brand ambassadors that received equity in FTX and were characterized in the litigation as “parties who either controlled, promoted, assisted in, and actively participated in” the “offer and sale of unregistered” yield-bearing FTX US investment products that were, in fact, unregulated securities.

The suit’s “main focus” is making whole FTX US app users whose funds have been frozen, the attorney said — an endeavor he dubbed “absolutely realistic,” albeit “difficult.” 

The lawsuit calls FTX a “deceptive” platform, a “house of cards,” and a Ponzi scheme that “shuffled customer funds between their opaque affiliated entities, using new investor funds obtained through investments…and loans to pay interest to the old ones and to attempt to maintain the appearance of liquidity.” 

Asked what precedent this lawsuit may set, Moskowitz answered that “greed doesn’t pay off” and that the only people who are going to get hurt are the consumers.

Moskowitz is also behind another crypto-focused class action against Mark Cuban, the Dallas Mavericks and Stephen Ehrlich — founder and CEO of Voyager Digital — seeking to recover damages on behalf of Voyager customers.

FTX won a bankruptcy auction in September to buy Voyager’s assets, before collapsing into bankruptcy itself last week. Now, Voyager is looking for a new buyer.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

logo.jpeg

Research

Akash is a general-purpose compute platform with GPUs, storage, LLM training or inference, and validator hosting through its two-sided marketplace.

article-image

The SEC could allow half a dozen or more such funds to launch at once, Ark Invest CEO says

article-image

2023 saw a decline in a16z crypto funding, but the behemoth VC firm teased what it’s excited for next year

article-image

“Iran Unchained” launched a new version of its grant platform to make donations to activists easier

article-image

The stablecoin marks the first time a regulated European bank has made a euro-pegged stablecoin available on a crypto exchange

article-image

Build it and they will come, perhaps, but making crypto easier to use is turning out to be just as important

article-image

Amid moves by Itau Unibanco and Nubank, the country could serve as “a proof of concept” for TradFi-crypto integrations, industry research exec says