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Cryptocurrency investors burned by the spectacular failure of FTX are ready to sue exchange founder Sam Bankman-Fried and the celebrities who participated in its promotion. In a class action lawsuit filed late Tuesday in Miami, prosecutors targeted celebrities, including Tom Brady, Larry David and Steph Curry, alleging that by shilling FTX they were participating in deceptive practices.
https://www.youtube.com/watch?v=BH5-rSxilxo
The lawsuit also alleges that FTX sold unregistered securities in the form of yield-bearing accounts. According to the lawsuit, the defendants made “misrepresentations and omissions” designed to “instill confidence and induce consumers to invest in what was ultimately a Ponzi scheme.”
The lawsuit, filed Tuesday in U.S. District Court in Miami, alleges that FTX was designed “to take advantage of inexperienced investors” by persuading them to use the company’s services to invest in crypto. None of the defendants who appeared in advertisements for the investment platform “conducted any due diligence prior to marketing these FTX products to the public,” the filing added.
Well-known lawyer David Boos — who recently represented Theranos businesskinda.com Elizabeth Holmes in her fraud lawsuit — filed the lawsuit on behalf of Oklahoman Edwin Garrison, owner of an interest-bearing FTX account.
The filing states that while the celebrities named as defendants revealed they had a partnership with FTX, they did not provide details about “the nature, scope and amount of compensation they personally received in exchange for the promotion of the misleading FTX platform.”
Court documents point out that the Securities Exchange Commission (SEC) has said that “failure to disclose this information would be a violation of the anti-advertising provisions of the federal securities laws.”
The lawsuit did not ask for a specific dollar amount, but claimed that the defendants may be liable for “many billions of dollars in damages”.
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