Celebrity promoters of now-bankrupt cryptocurrency exchange FTX — including Larry David, Tom Brady, Gisele Bündchen, Shaquille O’Neal and Stephen Curry — have been named in a class-action lawsuit accusing FTX and its “brand ambassadors” of deceptively encouraging consumers to invest in the company.
In a complaint filed Nov. 15 in Florida federal district court, Edwin Garrison, an Oklahoma resident who says he purchased a yield-bearing account from FTX, seeks to represent a class of “thousands, if not millions, of consumers nationwide” who were allegedly defrauded by the company. The lawsuit alleges FTX and ex-CEO Sam Bankman-Fried, who are also named as defendants, used the celebrity endorsers to target “unsophisticated investors” in a “Ponzi scheme” to keep the crypto exchange afloat.
“Part of the scheme employed by the FTX Entities involved utilizing some of the biggest names in sports and entertainment — like these Defendants — to raise funds and drive American consumers to invest” in FTX’s yield-bearing accounts, which the lawsuit alleges represented unregistered securities under federal and Florida law.
The suit seeks unspecified monetary damages, alleging the FTX collapse resulted in consumers collectively losing more than $11 billion.
David, whom the lawsuit identifies as the “legendary comedian” and creator of “Seinfeld” and “Curb Your Enthusiasm,” appeared in an ad for FTX called “Don’t Miss Out on Crypto,” which aired during the 2022 Super Bowl. “The ad — the only Super Bowl commercial David ever appeared in — featured David being a skeptic on such historically important inventions as the wheel, the fork, the toilet, democracy, the light bulb, the dishwasher, the Sony Walkman, and, of course, FTX, and cautioned viewers, ‘Don’t be like Larry,'” the lawsuit says.
In addition, the lawsuit cites a 2021 ad that featured Brady and his then-wife Bündchen titled “FTX. You In?” in which they encouraged acquaintances to join the platform.
Also named as defendants in the suit are the Golden State Warriors (which entered into a promotional deal with FTX this year and emblazoned the company’s logo on its court at San Francisco’s Chase Center), Udonis Haslem, David Ortiz, William Trevor Lawrence, Shohei Ohtani, Naomi Osaka and Kevin O’Leary. The defendants named in the suit “either controlled, promoted, assisted in [or] actively participated” in FTX’s business, per the lawsuit.
“The Deceptive FTX Platform maintained by the FTX Entities was truly a house of cards, a where the FTX Entities shuffled customer funds between their opaque affiliated entities, using new investor funds obtained through investments in the [yield-bearing accounts] and loans to pay interest to the old ones and to attempt to maintain the appearance of liquidity,” the lawsuit alleges.
Last week, Bankman-Fried resigned as CEO of FTX. The company — which at one time held a reported $50 billion in assets — filed for Chapter 11 bankruptcy protection, after a run on deposits left it with an $8 billion shortfall in assets. Meanwhile, the SEC and and Justice Department have launched investigations into FTX.
The lawsuit was filed Tuesday in U.S. District Court for the Southern District of Florida in Miami. The case is Docket No. 1:22-CV-23753-KMM.
Pictured above: Sam Bankman-Fried
