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Investors have filed a class action lawsuit seeking $11 billion in damages against Crypto platform FTX’s  founder Sam Bankman-Fried and various  celebrity endorsers who   promoted the platform, including Shaquille O’Neal,  Larry David, Tom Brady, and Stephen Curry. FTX filed for bankruptcy on Nov. 11.

The lawsuit alleges that the failed  FTX Platform was based upon false representations and   deceptive conduct to take advantage of   unsophisticated investors who made investments. The complaint states  that FTX and its affiliates used  celebrity endorsers to raise funds pouring billions of dollars into the  FTX Platform to keep the company  afloat.

The suit alleges that the endorsers  never disclosed the nature, scope, and amount of compensation they personally received in   exchange for the promotion of the FTX Platform, and  that a  failure to disclose is  a violation of the anti-touting provisions of the federal  securities laws. Furthermore, Plaintiffs alleged that  none of these defendants performed any due diligence prior to marketing   these FTX products to the public.

The lawsuit cites other celebrities similarly accused and prosecuted for failing to disclose their paid   endorsements including  Kim Kardashian and basketball player Paul Pierce. According to the FTC, investors  have lost more than $80 million in crypto scams, due in large part to celebrity endorsements. Kim Kardashian reportedly  settled similar claims this year by the SEC for $1.26 million without admitting any  wrongdoing.

Read the lawsuit


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