Sam Bankman-Fried, the disgraced entrepreneur, has pledged to support FTX investors in their ongoing legal disputes with the company’s famous endorsers such as Tom Brady, Shaquille O’Neal, Stephen Curry, Shohei Ohtani, Gisele Bundchen, and Larry David.
According to Bloomberg, Sam Bankman-Fried – the founder of FTX in 2019 who later led the cryptocurrency exchange into bankruptcy in 2022 – has consented to participate in the ongoing class action lawsuit.
High-profile celebrities helped market the crypto exchange in its heyday.
Class action lawyer Adam Moskowitz recently filed a lawsuit against celebrity endorsers for allegedly misrepresenting the safety of cryptocurrencies through deceitful and false claims.
A number of FTX investors and users have decided to withdraw their legal actions against Sam Bankman-Fried, allowing him to assist in the legal proceedings against other defendants concerning the cryptocurrency exchange’s failure.
— Bloomberg Crypto (@crypto) April 19, 2024
At one point, the crypto exchange enjoyed a large following and power in the industry, thanks to Bankman-Fried’s skillful use of famous people endorsing it, leading to remarkable growth.
Through his efforts, Bankman-Fried amassed an astonishing $32 billion fortune and ranked FTX as one of the top three biggest crypto exchanges globally – until its unfortunate downfall.
After the FTX crash, a chain reaction of lawsuits ensued, ultimately resulting in Bankman-Fried being sentenced to serve 25 years in prison for defrauding FTX’s clients.
The previous CEO has filed an appeal for his criminal conviction and punishment. He is now residing at the Metropolitan Detention Center in Brooklyn, New York, awaiting transportation to serve his sentence in a federal prison.
These individuals are facing allegations of illegally selling unregistered securities on FTX. If these accusations are true, the consequences for their legal status could be significant.
Celebrities and FTX
During an NBA game in March 2023, a class-action lawsuit against Shaquille O’Neal was officially delivered to him.
The lawsuit claims that O’Neal’s involvement in FTX’s “I Am All In” advertising campaign, which heavily promoted the exchange, misled consumers into engaging with FTX, ultimately resulting in financial damages due to the exchange’s subsequent failure.
Tom Brady is said to have suffered a significant financial loss of approximately $30 million due to the failure of FTX. A large portion of this loss came from stock holdings, which have become worthless, that were given to him as part of his role as an “ambassador” for the exchange in 2021.
According to reports, Bundchen, his ex-wife, is said to have incurred a loss of approximately $18 million from failed investments in FTX’s now-defunct stocks.
Larry David admitted to The Associated Press that he suffered significant financial losses when FTX ran into trouble. In hindsight, he regretted taking counsel from his crypto-savvy friends who vouched for the legitimacy of the company.
Investors involved in the lawsuits related to FTX’s downfall are optimistic about recovering some of their losses. Bankman-Fried may provide evidence that strengthens their argument against the endorsement-giving celebrities.
With a judge’s approval, Bankman-Fried’s agreement would result in the dismissal of current and future civil claims against him. In return, he would disclose non-confidential records outlining his possessions and financial investments, along with details concerning defendants involved in the ongoing civil lawsuit.
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2024-04-21 23:42