- The investors describe FTX and its linked businesses as a real ponzi scheme.
- The lawsuit was filed in Florida’s Southern District Court by two major law firms.
To recoup their losses, a group of investors filed a class action lawsuit against the defunct cryptocurrency exchange FTX, its founder Sam Bankman-Fried, and several celebrities, alleging that they participated in a “fraudulent scheme” to “take advantage of unsophisticated investors from across the country.”
Defendants were accused of actively participating in the “offer and sale of unregistered securities in the form of yield-bearing accounts.” According to a lawsuit filed in Florida’s Southern District Court by two major law firms.
$11 Billion in Damages
The lawsuit claims FTX utilized new investor money received via investments in the yield-bearing accounts. And loans to pay interest to the old ones and to seek to preserve the impression of liquidity. Describing FTX and its linked businesses as a real “house of cards” and “a Ponzi scheme.” Where the parties involved “shuffled customer funds between their opaque affiliated entities.”
Moreover, according to the court filing, the plaintiffs allege that “American consumers collectively sustained over $11 billion in damages” as a consequence of FTX’s fraudulent operations. Furthermore, the complaint also names a number of celebrities and sportsmen as defendants for their alleged participation in marketing efforts and their positions as “brand ambassadors” for FTX on social media.
NFL quarterback Tom Brady, supermodel Gisele Bündchen, tennis player Naomi Osaka, NBA legend Shaquille O’Neal, Shark Tank star Kevin O’Leary, and the Golden State Warriors are just some of the famous names who have been linked to promoting FTX. At this moment, it is still unknown whether or not these people bear any responsibility post FTX’s demise.
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