The black swan event of the crypto industry, FTX-saga, occurred in November 2020 causing over $8 Billion in damages. It started a domino effect affecting almost everyone in the industry. Authorities placed multiple charges on FTX’s executives; the trial is underway. Lawsuits were filed against celebrities like Tom Brady, Shaquille O’Neal and others for endorsing FTX, and ex compliance chief is cooperating.
Celebrities in Trouble for Endorsing FTX
The case against Shaquille O’Neal, Tom Brady and others for promoting FTX has gained cooperation from former compliance chief Dan Friedberg. The support came to light in the amended complaint filed on May 11, 2023.
The complaint alleges that 11 celebrities, like NFL star Tom Brady, NBA star O’Neal, comedian Larry David, tennis star Naomi Osaka, and the Golden State Warriors, were the brand ambassadors of FTX and promoted unregistered securities.
Friedberg provided evidence that the said FTX promotional activities took place in Florida. However, the defendants claimed that they should not be targeted as they are not residents of the Sunshine State.
According to Florida law, the plaintiffs Steph Curry, Larry David and three others argued that these celebrities are liable for the losses incurred by FTX customers when the exchange collapsed.
The plaintiffs are asking the celebrities to pay billions of dollars worth of damages incurred.
The Warriors, David, Osaka, Steph Curry, former NBA MVP, and two-way MLB superstar Shohei Ohtani argued that they do not come under the jurisdiction for the lawsuit. Because none of the activity like signing the contract, shooting for advertisements etc occured in Florida. But Friedberg’s evidence in Thursday’s amended complaint shows that no other state has deeper connections with the FTX brand ambassador defendants than Florida.
Celebrities like Tom Brady and others never bothered to ask FTX about unregistered securities, but Taylor Swift asked and did not sign on the dotted line. Interestingly former NFL star and his ex-wife supermodel, Gisele Bundchen, are among the defendants.
The former couple were reportedly joint investors in FTX, each with an equity stake. FTX investor Edwin Garrison sued the power couple in November 2022.
The list of 12 defendants named in the lawsuit includes NFL star Tom Brady, his ex-wife Gisele Bundchen; David, Curry, the Warriors; Udonis Haslem, the NBA player, Jacksonville Jaguars’ quarterback Trevor Lawrence; Shark Tank star Kevin O’Leary; Ohtani, O’Neal; ex-MLB star David Ortiz, and Naomi Osaka.
Friedberg was the chief regulatory officer for FTX and compliance officer for FTX. He resigned before November 2020. In the original complaint, he was listed as a defendant. He agreed to comply with the plaintiff but decided to cooperate with the plaintiffs in exchange for being freed from liability.
FTX, once the world’s third-largest crypto exchange, filed for Chapter 11 bankruptcy on November 11, 2023. The exchange is alleged to be misusing investors’ funds, lobbying politicians to alter proposed crypto regulations, etc. The Bahamas-based crypto exchange started in 2019 and became one of the largest.
This implosion created a contagion effect causing the crypto market to drop significantly. Also, general investors lost trust, and the aftereffects intensified the impact of the already harsh crypto winter.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing
Source: https://www.thecoinrepublic.com/2023/05/14/ftx-saga-celebrities-facing-lawsuits-for-endorsing-troubled/