Topline
The Golden State Warriors were named in a lawsuit Monday alleging the bankrupt cryptocurrency exchange FTX used the reigning NBA champions to fraudulently promote its platform, as more sport enterprises continue to distance themselves after FTX’s recent collapse.
The Golden State Warriors were named in a lawsuit involving its promotion of FTX.
Key Facts
Elliott Lam, a Canadian citizen and Hong Kong resident, sued the Warriors, FTX founder Sam Bankman-Fried and Alameda Research CEO Caroline Ellison in San Francisco.
Lam claims he lost $750,000 in his FTX account after using the now-bankrupt cryptocurrency exchange and is seeking damages in the proposed class-action suit for anyone with a FTX yield-bearing account located outside of the U.S.
Lam alleges the Warriors, Bankman-Fried and Ellison promoted FTX as a “viable and safe way to invest in crypto” and “reasonably should have known that all these claims … were untrue or misleading.”
Stephen Curry, a member of the Warriors roster since 2009 who announced his own partnership with FTX in September 2021, was sued in a separate lawsuit that also named the Warriors and several celebrity endorsers.
The franchise announced last week it had paused all FTX-related promotions, according to an ESPN report, after distributing a bobblehead of guard Jordan Poole which featured the company’s logo.
The Warriors did not immediately respond to a request for comment from Forbes.
Big Number
$10 million. That’s the estimated total FTX offered the Warriors for several years of in-arena promotions last year, according to CNBC.
Key Background
The Warriors announced a partnership with FTX last December, describing it as the first between a cryptocurrency platform and a professional sports franchise—with FTX debuting as the franchise’s official cryptocurrency platform. However, FTX filed for Chapter 11 bankruptcy and Bankman-Fried resigned as CEO earlier this month, after the exchange faced a liquidity crisis that made the once-popular platfrom’s customers unable to recover their funds. Valued at $32 billion in January with backing from major institutional investors, the company’s collapse followed reports about questionable trading practices at the company and Bankman-Fried’s trading firm, Alameda Research. Amid the platform’s financial troubles, the sports industry has distanced itself from the company: Major League Baseball terminated its sponsorship on November 17, and the Miami Heat, which featured the company’s logo on its arena in a $135 million deal, also recently ended its relationship with FTX.
Further Reading
NBA Champions Golden State Warriors Are Sued Over FTX Collapse (Reuters)
FTX Files For Bankruptcy — Former Billionaire Sam Bankman-Fried Resigns As CEO (Forbes)
MLB Latest Sports Enterprise To Distance Itself From Onetime Prominent Sponsor FTX (Forbes)
Source: https://www.forbes.com/sites/tylerroush/2022/11/21/ftx-user-sues-golden-state-warriors-for-promoting-crypto-platform/