Sam Bankman-Fried, FTX investors vs. celebrity endorsers
Disgraced entrepreneur Sam Bankman-Fried agreed to help FTX investors in their legal spat with the company’s celebrity endorsers, including Tom Brady, Shaquille O’Neal, Stephen Curry, and Shohei Ohtani, as well as supermodel Gisele Bundchen and actor Larry David.
Bankman-Fried, who founded FTX in 2019 and caused its bankruptcy in 2022, has agreed to cooperate in the class action lawsuit, according to Bloomberg.
High-profile celebrities helped market the crypto exchange in its heyday.
Adam Moskowitz, a class action attorney, filed the suit accusing the celebrity endorsers of deception and making false claims about the safety of crypto assets.
The crypto exchange once boasted significant popularity and influence, with Bankman-Fried showing adeptness at leveraging celebrity endorsements to facilitate the platform’s meteoric rise.
It resulted in a staggering $32 billion fortune for Bankman-Fried and placed FTX among the top three largest crypto exchanges in the world before everything came crumbling down.
The FTX collapse led to a cascade of legal actions, culminating in the sentencing of Bankman-Fried to 25 years in prison for his role in defrauding customers of the exchange.
The former CEO has appealed against his conviction and sentence and is currently held at the Metropolitan Detention Center in Brooklyn, New York, pending transfer to prison.
These figures stand accused of promoting unregistered securities on FTX, a charge that, if proven, could have profound implications for their legal standing.
Celebrities and FTX
Shaquille O’Neal was formally served with the FTX class-action lawsuit during an NBA game in March 2023.
The lawsuit alleges that the “FTX: I Am All In” marketing campaign, prominently featuring O’Neal, deceitfully influenced consumers to engage with FTX, culminating in financial losses following the exchange’s collapse.
Tom Brady is reported to have lost a staggering $30 million in the collapse of FTX, mostly made up of now-worthless shares that were part of his arrangement with the exchange in 2021 when he served as an “ambassador.”
Bundchen, his former spouse, also reportedly suffered losses of $18 million on defunct stock investments tied to FTX.
Larry David told The Associated Press that he had lost “a lot of money” after things went south for FTX. He also called himself an “idiot” for seeking advice from his friends who were supposedly knowledgeable about crypto and who assured him that the company was legitimate.
The investors embroiled in the litigation harbor hopes of getting back a portion of their losses incurred from the collapse of FTX. Bankman-Fried could be in a position to bolster their case against the celebrity endorsers.
If approved by a judge, their agreement will lead to the dropping of civil liabilities against Bankman-Fried now and in the future. In exchange, the ex-CEO will provide non-privileged documents detailing his assets and investments, as well as information on defendants in the civil case.
