Until 2022, Larry David had never been in a commercial. But that changed when he made his debut in a Super Bowl ad for the cryptocurrency platform FTX. The advertisement, titled “Don’t Miss Out,” featured him playing his famous role from “Curb Your Enthusiasm” as a skeptic who travels through time and criticizes inventions. However, when presented with FTX as a simple and secure way to invest in cryptocurrency, even he, a notorious doubter, had to reconsider his stance. “Ehhh, I don’t think so,” he said. “And I’ve never been wrong about this kind of thing… Never.
The ad ends with a title card that states, “Don’t be like Larry. Don’t miss out.”
Towards the end of that year, FTX faced a dramatic collapse. This incident led to several investors filing lawsuits against David, who had been given a reported sum of $13 million for his role in the advertisements, as well as other high-profile figures who supported the company.
In a recent court case involving David and several celebrities, accusations of illegally promoting a crypto exchange were dropped on Wednesday. The reason being, U.S. District Judge K. Michael Moore found that these endorsers didn’t intend to mislead consumers. Despite their lack of knowledge about the workings of the platform, they weren’t deemed responsible for any investor losses since they weren’t aware of FTX’s fraudulent activities beforehand. As a fan keeping up with this news, it’s a relief to see that the judge recognizes the difference between ignorance and intentional deception.
The issue at hand arises from one of the most prominent cases of financial fraud in U.S. history, and it questions whether influential figures in the entertainment industry, such as athletes, models, comedians, and internet personalities, can be held accountable for using their celebrity status to endorse what some consider unregistered securities.
In 2022, a court case, labeled as a class action, was brought forward, claiming that FTX operated as a Ponzi scheme and dishonestly transferred client funds among its related companies. The lawsuit further implicated celebrity endorsers for their part in aiding the exchange’s deception.
The following individuals and entities were mentioned in the lawsuit: Shohei Ohtani, Stephen Curry, Tom Brady, Gisele Bundchen, Shaquille O’Neal, Naomi Osaka, as well as Creators Agency. They were all associated with FTX through ads and events without disclosing that they owned equity in the company due to their roles as brand ambassadors. In a commercial featuring Curry, he emphasized that he was not an expert in cryptocurrency but claimed “I don’t need to be. With FTX, I have all I need to buy, sell, and trade crypto securely.”
The lawsuit named athletes like Shohei Ohtani, Stephen Curry, Tom Brady, and others, along with a talent agency, for promoting the cryptocurrency platform FTX without disclosing that they received ownership in the company. In one ad, Stephen Curry said he wasn’t an expert in cryptocurrencies but could still use FTX to buy, sell, and trade them safely.
The dismissal included accusations of state securities violations, breaches of consumer protection and fair competition laws, as well as false advertising. In his statement, Moore explained that while Plaintiffs have claimed the Defendants engaged in deceptive practices, they have yet to provide any specifics regarding the alleged scheme other than stating that the Defendants were rewarded substantially for promoting their FTX products.
As a gamer, I’ve learned that it’s crucial to be aware of potential scams when someone famous is endorsing a game or investment opportunity. It seems these investors are saying that the celebrities were warned about signs of fraud, and they knew very well their influence could persuade people to take risks based on unwise advice.
The court decided that celebrities cannot be held responsible for promoting FTX’s allegedly unregistered securities if they merely received payment or other financial rewards for their endorsements.
Moore is providing investors with a new opportunity to reconsider their previously rejected complaints. However, they must provide compelling proof that the high-profile endorsers were aware of FTX’s deceit and still chose to endorse its service.
Certain allegations were given the green light to move forward. Among them are accusations related to breaches of Florida and Oklahoma’s securities regulations.
The question of whether the offerings from FTX can be classified as unregistered securities is still a subject of debate.
Making investments in cryptocurrencies and crypto trading platforms proved profitable for certain individuals. Kevin O’Leary, a cast member on Shark Tank and an endorser of FTX, appeared before the Senate Banking Committee. He disclosed that FTX paid him $18 million to endorse the exchange, with $3 million set aside for taxes, $1 million in FTX shares (which he described as “probably valueless”), and $10 million in cryptocurrency tokens kept in FTX wallets (“I have deemed them to be worth nothing,” he informed the committee).
Notable figures who advocate for cryptocurrencies and other digital assets have faced legal issues, which is a significant factor in lawsuits claiming fraud. For instance, in 2022, the Securities and Exchange Commission accused Kim Kardashian of not disclosing that she was paid $250,000 for endorsing EthereumMax on Instagram. She settled this case by paying $1.3 million. Similarly, Floyd Mayweather Jr. and DJ Khaled have resolved cases filed by the SEC due to their failure to reveal payments they received for promoting investments in an initial coin offering.
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2025-05-08 22:55