Per a report from the Washington Examiner, NFL Legend Tom Brady and others are facing a class action lawsuit from FTX investors. The football player is one of the many celebrity ambassadors who vouched for the crypto exchange platform.
Earlier this week, FTX halted new request withdrawals from its users. Later, its former top executive Sam Bankman-Fried filed for bankruptcy protection in the United States.
In the meantime, millions of dollars in users’ funds are stuck at the venue. Shortly after, these funds were stolen by a bad actor, adding more uncertainty to a volatile situation.
According to the report, Edwin Garrison from Oklahoma leads the class action. The document claims FTX was offering its users a securities-based product in alleged violation of U.S. laws. The plaintiff filed the complaint in the Florida Federal Court.
The complaint claims the following, according to the Washington Examiner:
The Deceptive and failed FTX Platform was based upon false representations and deceptive conduct, fraudulent scheme was designed to take advantage of unsophisticated investors from across the country, who utilize mobile apps to make their investments.
Tom Brady, Shaquille O’Neal, Larry Davis And Others Under Scrutiny
In addition to Tom Brady and Sam Bankman-Fried, the complaints accuse supermodel Gisele Bundchen, the NBA team Golden State Warriors, NBA player Stephen Curry, former NBA player Shaquille O’Neal, Udonis Haslem, tennis player Naomi Osaka, comedian Larry David, and entrepreneur Kevin “Mr. Wonderful” O’Leary.
The complaint claims these individuals allegedly promoted and assisted FTX in its illegal activities. Adam Moskowitz, the attorney representing Garrison and others, stated:
FTX were geniuses at public relations and marketing and knew that such a massive Ponzi scheme larger than the Madoff scheme could only be successful with the help and promotion of the most famous, respected, and beloved celebrities and influencers in the world.
Moskowitz claims FTX implemented a “mastermind” marketing plan to promote its “scheme.” The lawyer quoted O’Neal in one of his videos for the crypto exchange. The NBA promoted the trading platform by stating the following, Garrison’s legal representation said:
Defendant Shaquille O’Neal, former professional NBA basketball star, sports analyst, and entrepreneur, also became an FTX ambassador, stating in a video posted on FTX’s Twitter account that ‘I’m excited to be partnering with FTX to help make crypto accessible for everyone. I’m all in. Are you?
At the time of writing, there is no official statement from the defendants. The crypto market continues to trend to the downside in the wake of FTX’s collapse.
Bitcoin, the largest crypto by market capitalization, lost support at around $17,600 and recorded a new yearly low at about $15,500. The general sentiment in the market leans towards fear as market participants expect further depreciation.