By George Ward
The unexpected fall of FTX has continued to dive deep into the cryptocurrency community. Celebrities who have had contact with them or have endorsed the FTX exchange are now under serious investigation.
Their involvement has led a group of investors to file a class action lawsuit against them for endorsing the exchange. Famous figures, including Tom Brady, Gisele Bundchen, Naomi Osaka, Larry David, Stephen Curry, and the Golden State Warriors, are on the list.
The lawsuit describes the exchange as a Ponzi scheme that allegedly used celebrity endorsements to lure in naive investors.
FTX’s Ponzi scheme was meant to prey on inexperienced investors throughout the country. As a result, American consumers suffered nearly $11 billion in losses.”
Case Might Be Filed In Federal Court
The lawsuit, filed in Miami, claimed that the losses suffered by citizens are more than the $5 million threshold that must be met to initiate a case in federal court. The document also declares that it wants to speak on behalf of thousands of people who submitted securities as interest-bearing accounts.
This lawsuit is the most recent impact of FTX’s demise, which shocked the cryptocurrency community. But reports indicated that the exchange had engaged in several unethical activities.
Such activities include dubious accounting methods, looting client funds, and making risky investments. Meanwhile, incriminating emails which FTX destroyed have been found.
According to the lawsuit, FTX and the influential personalities connected to the exchange engaged in an unlawful civil conspiracy. Also, they violated Florida securities and consumer protection rules.
The charges are based on an important fact, namely that FTX.US purposefully directed users to their foreign exchange app. Then, it claims that investors could buy “yield-bearing accounts” and take advantage of ROI rates as high as 8% for lending assets like ETH.
This is crucial since FTX has continuously said that US citizens are prohibited from trading on the foreign exchange app. It also claimed to have aggressively discouraged potential consumers from utilizing the exchange.
Edwin Garrison, one of the complainants, stated that he registered with FTX US and represented himself as a US citizen. However, the application continued to display advertisements meant for the foreign exchange app.
Following the collapse, the Golden State Warriors, who had routinely featured in-arena advertisements for FTX, stated that all FTX-related marketing would be suspended. The defending champs also stated that the last FTX promotion was a Jordan Poole bobblehead watched by 10,000 spectators during Monday’s game.