Ornella Hernandez

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.&nbsp;



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, <a href="https://cms.blockworks.co/tag/sam-bankman-fried/" target="_blank" rel="noreferrer noopener">Sam Bankman-Fried</a> orchestrated “massive fraud” in improperly trading customer funds. 



Defendants include the following: <a href="https://cms.blockworks.co/news/celebrities-erase-ftx-ties/" target="_blank" rel="noreferrer noopener">Tom Brady</a>, 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.&nbsp;



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&#8217;ve never heard of.”



Brady and <a href="https://cms.blockworks.co/news/ftx-names-stephen-curry-a-global-ambassador/" target="_blank" rel="noreferrer noopener">Curry were brand ambassadors</a> 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 <a href="https://cms.blockworks.co/tag/ftx-us/" target="_blank" rel="noreferrer noopener">FTX US</a> 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.”&nbsp;



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&#8217;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 <a href="https://cms.blockworks.co/news/ftx-us-wins-voyager-digital-asset-auction-for-1-4b/" target="_blank" rel="noreferrer noopener">won a bankruptcy auction in September</a> to buy Voyager’s assets, before collapsing into bankruptcy itself last week. Now, Voyager is looking for a new buyer.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

bankruptcy

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

Ben Strack

<div id="highlights-block_623a29cff3ea8" class="highlights">
 <ul>
 <li>Crypto.com had already made deals with the Australian Football League and Formula One this year</li>
 <li>Competitor FTX landed a partnership with tennis player Naomi Osaka on Monday</li>
 </ul>
 
</div>



Crypto.com will be a sponsor for the 2022 FIFA <a href="https://www.fifa.com" target="_blank" rel="noreferrer noopener">World Cup</a>, which is set to take place in Qatar in November and December.



As the exclusive cryptocurrency trading platform sponsor for the soccer event, the company’s brand will be on display inside and outside the tournament’s stadiums. Crypto.com will also offer opportunities for new and existing users to attend matches or win exclusive merchandise.



“There is no platform bigger, or with a greater reach and cultural impact, than FIFA’s global platform of football,” FIFA Chief Commercial Officer Kay Madati said in a statement. “We are delighted to have a global brand like Crypto.com join us as a sponsor of the exciting and groundbreaking FIFA World Cup in Qatar, ultimately helping to grow our beautiful game on a global scale.”



The company has made sports sponsorship deals a <a href="https://cms.blockworks.co/crypto-com-cmo-on-how-company-went-from-app-to-global-brand/" target="_blank" rel="noreferrer noopener">core component</a> of its brand-building campaign. It bought the naming rights to the Staples Center in Los Angeles last November as part of a 20-year, $700 million deal and aired a commercial starring actor Matt Damon.



In January this year it <a href="https://cms.blockworks.co/crypto-com-australian-football-league-sign-18m-sponsorship-deal-in-country-first/" target="_blank" rel="noreferrer noopener">signed a five-year sponsorship deal</a> with the Australian Football League and last month announced it would sponsor what will be known as the Formula One Crypto.com Miami Grand Prix in May.



The company was also among several industry heavyweights, including FTX and Coinbase, to run an advertisement <a href="https://cms.blockworks.co/super-bowl-ads-spark-public-interest-coinbase-site-crashes-from-traffic/" target="_blank" rel="noreferrer noopener">during the Super Bowl</a> on Feb. 13. The 30-second commercial featured LeBron James and followed Crypto.com’s <a href="https://cms.blockworks.co/lebron-james-partners-with-crypto-com-to-help-kids-learn-about-digital-future/" target="_blank" rel="noreferrer noopener">partnership with the four-time NBA champion</a> to teach kids about crypto technology.



Other crypto firms have kept pace on the sports marketing front. Terra, for example, <a href="https://cms.blockworks.co/washington-nationals-latest-pro-sports-team-to-strike-crypto-deal/" target="_blank" rel="noreferrer noopener">partnered with the Washington Nationals</a> last month. The baseball team said that stablecoin TerraUSD (UST) could be accepted as a payment method at Nationals Park next season.



Most recently, FTX landed a deal with tennis player Naomi Osaka on Monday. Joining athletes Tom Brady, Stephen Curry and others as a brand ambassador for the crypto company, the four-time Grand Slam winner will produce content and projects to reach young women in crypto.



Founded in 2016,&nbsp;Crypto.com has more than 10 million customers and roughly 4,000 employees across its offices in the Americas, Europe and Asia.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Coinbase

Crypto.com Adds FIFA World Cup Sponsorship to Sports Marketing Strategy

Jacquelyn Melinek

<div id="highlights-block_61716cfd8b048" class="highlights">
 <ul>
 <li>The valuation increased 38.8% to $25 billion from $18 billion in July, when the company raised $900 million</li>
 <li>In the past three months alone, FTX’s user base has increased 48% and average trading volume is up 75% to about $14 billion per day in daily volume, the company said</li>
 </ul>
 
</div>



Sam Bankman-Fried’s global cryptocurrency exchange FTX has raised $420,690,000 in a Series B-1 fundraise, the company said in an announcement Thursday.&nbsp;



It’s probably no coincidence that the company raised that specific amount with the numbers 420, which references the date April 20th — a holiday celebrating marijuana — and 69, which represents&#8230;well, you know.&nbsp;



The valuation increased 38.8% to $25 billion from $18 billion in July, when the company raised <a href="https://cms.blockworks.co/ftx-closes-900m-series-b-round-valuing-exchange-at-18b/" target="_blank" rel="noreferrer noopener">$900 million in its Series B</a>. With that said, FTX disclosed that Temasek participated in the previous Series B, updating the total amount raised from $900 million to $1 billion.&nbsp;



In the past three months alone, FTX’s user base has increased 48% and average trading volume is up 75% to about $14 billion per day in daily volume, the company said.&nbsp;



<h3 class="wp-block-heading">69 Investors</h3>



There were, yes, 69 investors who participated in this round, including funds and accounts managed by BlackRock, which has $9.49 trillion assets under management.&nbsp;



Other investors include Ontario Teachers&#8217; Pension Plan Board, via its Teachers&#8217; Innovation Platform, Temasek, Sequoia Capital, Sea Capital, IVP, ICONIQ Growth, Tiger Global, Ribbit Capital and Lightspeed Venture Partners.&nbsp;



“The additional capital and group of investors will let us provide the experience our users deserve and address other adjacent market opportunities including equities, prediction markets, NFTs and videogame partnerships,” said Ramnik Arora, head of product at FTX, said in a statement.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“We expect to make strategic investments designed to grow the business and expand our regulatory coverage,” Arora added.</blockquote>



The funding will be used to expand FTX to new jurisdictions, improve current offerings and continue to establish itself.&nbsp;



In general, FTX is ramping up its presence, both in the crypto world and in sports, sponsoring activities as diverse as basketball and chess, as part of an effort to reach a mainstream audience and expand its reach.&nbsp;



Recently, FTX named Stephen Curry, a three-time NBA champion, a global ambassador, Blockworks <a href="https://cms.blockworks.co/ftx-names-stephen-curry-a-global-ambassador/">previously reported</a>.&nbsp;&nbsp;



<a href="https://cms.blockworks.co/ftx-inks-135m-sponsorship-deal-for-miami-heat-arena/" target="_blank" rel="noreferrer noopener">In March</a>, the company finalized a 19-year, $135 million deal with Miami-Dade County in Florida to take over naming rights of the county’s basketball stadium for the Miami Heat, formerly known as American Airlines Arena.&nbsp;In June, the exchange <a href="https://www.bloomberg.com/news/articles/2021-06-23/crypto-firm-ftx-to-sponsor-major-league-baseball-in-partnership" target="_blank" rel="noreferrer noopener">expanded its sponsorship</a> of US professional sports when it signed a sponsorship deal with Major League Baseball. Also in June, National Football League star and rising crypto influencer Tom Brady became an “ambassador” for FTX in exchange for an equity position in the company.

Sam Bankman-Fried’s FTX Raises Precisely $420.69M

<div id="highlights-block_6137c1cb49140" class="highlights">
 <ul>
 <li>Partnership with Curry follows deals with NFL quarterbacks Tom Brady and Trevor Lawrence as well as venture capitalist Kevin O’Leary</li>
 <li>Last week FTX acquired the parent company of digital currency futures and options exchange LedgerX as a way to bring crypto derivatives to its US user base</li>
 </ul>
 
</div>



Crypto exchange FTX has grabbed another high-profile athlete to further the reach of its brand and tout the viability of cryptocurrency as it looks to expand its US presence.&nbsp;



West Realm Shires Services Inc. and FTX Trading Limited, the companies behind FTX.US and FTX.COM, have entered into a long-term partnership with Stephen Curry, a three-time NBA champion who has won two Most Valuable Player awards.&nbsp;



Curry becomes a global ambassador for the company, FTX announced Tuesday, and the NBA star will receive an equity stake in FTX Trading Limited as part of the agreement. The deal with FTX comes about a week after the 33-year-old reportedly bought a <a href="https://boredapeyachtclub.com/#/">Bored Ape Yacht Club</a> NFT for $180,000 worth of Ether.



“I’m excited to partner with a company that demystifies the crypto space and eliminates the intimidation factor for first-time users,” Curry said in a statement.



In this new role, Curry will seek to expand the reach of the FTX brand and tout the viability of cryptocurrency to new audiences around the world through several upcoming initiatives, which will be announced in the coming months, a spokesperson told Blockworks.&nbsp;



The partnership comes during a year in which FTX has teamed up with other sports stars, including quarterbacks Tom Brady and Trevor Lawrence.



FTX also <a href="https://cms.blockworks.co/ftx-partners-with-shark-tanks-kevin-oleary/" target="_blank" rel="noreferrer noopener">revealed last month</a> that entrepreneur and venture capitalist Kevin O’Leary, best known for his longtime role on ABC’s Shark Tank, is being paid in crypto to serve as an ambassador after he made an equity investment in the company.



The efforts come as the company is looking to build out its US business. FTX <a href="https://cms.blockworks.co/ftx-closes-900m-series-b-round-valuing-exchange-at-18b/" target="_blank" rel="noreferrer noopener">raised $900 million</a> for its Series B round in July, valuing the company at $18 billion. CEO Sam Bankman-Fried has said that FTX.US is looking to get licensed where it can, noting that the fundraise would be used to ensure regulatory compliance.



FTX <a href="https://cms.blockworks.co/ftx-us-brings-crypto-derivatives-to-users-with-ledgerx-acquisition/" target="_blank" rel="noreferrer noopener">said last week</a> it is set to acquire the parent company of digital currency futures and options exchange <a href="https://www.ledgerx.com/" target="_blank" rel="noreferrer noopener">LedgerX</a> as a way to bring crypto derivatives to its US user base.



FTX was among the first in the crypto space to break into the sports world. It became the <a href="https://www.mlb.com/press-release/press-release-mlb-ftx-cryptocurrency-partnership" target="_blank" rel="noreferrer noopener">official cryptocurrency exchange brand</a> of Major League Baseball in June, as the league’s umpires have sported an FTX.US patch on their uniforms since the All-Star Game on July 13.



The company also finalized a 19-year, $135 million deal with Miami-Dade County in Florida earlier in the year to take over naming rights of the Miami Heat’s <a href="https://cms.blockworks.co/ftx-inks-135m-sponsorship-deal-for-miami-heat-arena/" target="_blank" rel="noreferrer noopener">stadium</a>.



Are you a UK or EU reader that cant get enough investor-focused content on digital assets?<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a>&nbsp;in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>.

Stephen Curry

Newsletter

Blockworks Research