The complaint, which was filed late on Tuesday, stated that these celebrities lent instant legitimacy to the network, making them as guilty as the platform’s founder, who oversaw its bankruptcy.
Tom Brady and Larry David are among the celebrities cited in a class-action complaint against the cryptocurrency exchange FTX, which accuses them of promoting the bankrupt company.
Last week, one of the world’s largest cryptocurrency exchanges, FTX, filed for bankruptcy – a stunning reversal of fortune for a company previously valued at $32 billion.
State and federal officials are investigating the Bahamas-based company and its founder, Sam Bankman-Fried, for allegedly investing depositors’ assets in unapproved ventures.
In addition, it owned the name rights to a Formula One racing team and a Miami sports venue.
Before its demise, FTX was known for employing prominent personalities to market its wares.
David, the creator of Seinfeld, as well as Brady, the star quarterback of the Tampa Bay Buccaneers, Shaquille O’Neal, Stephen Curry, and Naomi Osaka, appeared in its advertisements.
The complaint, which was filed late on Tuesday, said that these celebrities lent instant legitimacy to the site, making them just as guilty as Mr. Bankman-Fried.
Celebrities kept ‘scheme afloat’
It is not the first time a celebrity has been accused of promoting cryptocurrencies. In October, Kim Kardashian settled charges related to an Instagram post for $1.26m (£1.12m).
The reality television actress failed to declare that she was compensated $250,000 (£220,000) to promote a bitcoin asset on her stream.
Part of the scheme employed by the FTX Entities involved using some of the biggest names in sports and entertainment – such as these defendants – to raise funds and drive American consumers to invest… pouring billions of dollars into the deceptive FTX platform to keep the entire scheme afloat,” according to the lawsuit.
Adam Moskowitz, a class-action attorney, filed the claim in the southern district of Florida.
Mr. Moskowitz is the attorney representing the victims of a residential tower collapse in the state.
“Very grave allegations”
The crisis has prompted additional inquiries regarding the regulation of cryptocurrencies and other digital assets.
The Financial Services Committee of the US House of Representatives intends to hear from Mr. Bankman-Fried, who now faces potential civil and criminal prosecution.
Maxine Waters, chairwoman of the committee, stated, “The collapse of FTX has caused significant harm to over one million customers, many of whom were ordinary folks who had placed their life savings in the FTX cryptocurrency exchange, only to see it all vanish in a matter of seconds.”
The finance minister and deputy prime minister of Singapore stated that the collapse of the FTX exchange is accompanied by “very serious charges of potential fraud.”
Recent developments in the crypto market, according to Lawrence Wong, have reinforced the city-position state that it is “on the right track” in focusing on digital assets innovation while taking a strong stance against crypto speculation and trading by retail investors.
As FTX teetered on the brink of insolvency, Bitcoin and other cryptocurrencies were punished.
