Investors are not only suing Sam Bankman-Fried, but also celebrity endorsers of his bankrupt crypto firm FTX, including Tom Brady, ex-wife Gisele Bundchen and comedy legend Larry David.
The embattled founder behind the collapsed $32 billion ($47 billion) cryptocurrency exchange faces a criminal investigation in the Bahamas and a possible trip to the US to question the disappearance of billions of dollars in customer funds.
Attorneys, including star trial attorney David Boies, filed the lawsuit on behalf of Edwin Garrison, an Oklahoma resident who had a high-yielding FTX account that he funded with crypto assets to earn interest and others like him, reports the New York Post.
The list of celebrity backers, which includes baseball star David Ortiz, NBA star Steph Curry and basketball icon Shaquille O’Neal, are accused of engaging in fraudulent practices to sell high-yielding FTX currency accounts, according to the lawsuit.
Celebrity endorsers were involved in a Super Bowl promotion for FTX.
Watch an average of 9 NBA regular season games LIVE per week on ESPN on Kayo Sports on ESPN on Kayo Sports. New to Kayo? Start your free trial now >
“Part of the scheme employed by the FTX units was to leverage some of the biggest names in sports and entertainment… pouring billions of dollars into the Deceptive FTX platform to keep the entire scheme alive,” it said in the lawsuit.
Other big names listed as defendants in the lawsuit include Shark Tank investor Kevin O’Leary, Jacksonville Jaguars quarterback Trevor Lawrence, tennis player Naomi Osaka and Miami Heat star Udonis Haslem.
Bankman-Fried, whose net worth was at one point estimated at as much as $17 billion, is now broke – a shocking sin for someone who was once widely hailed as a genius in the cryptocurrency industry.
When the crypto exchange faltered due to liquidity problems, US investors suffered $11 billion in damages, according to the lawsuit.
The proposed class action lawsuit, filed in Miami late Tuesday, alleges that high-yield FTX accounts were unregistered securities illegally sold in the United States.
FTX had closed a number of sports-related deals, some of which are crumbling. The NBA’s Miami Heat and Miami-Dade County decided on Friday to end their relationship with FTX and rename the team’s arena.
Earlier on Friday, Mercedes announced that it would immediately remove FTX logos from its Formula 1 cars.
FTX was “ultimately a Ponzi scheme that misled clients and prospective clients with the false impression that all cryptocurrency assets held on the Deceptive FTX platform are safe and not invested in unregistered securities,” the lawsuit states.
Brady and Bundchen, who also appeared in commercials for FTX, bought shares in the company, which was forced to file for bankruptcy protection last week after it was revealed it was using customer deposits to make risky bets through a subsidiary research firm.
Meanwhile, Bankman-Fried could be in hot water with federal investigators. Sources familiar with the matter told Bloomberg News that US and Bahamian authorities have been discussing a possible extradition of 30-year-old Bankman-Fried, whose company is based in the US Bahamas.
Bankman-Fried is said to be cooperating with investigators in the Bahamas. It’s likely he’ll be brought back to the US for questioning, although it’s premature to discuss possible criminal charges, according to Bloomberg.
After FTX filed for bankruptcy, Bankman-Fried took to Twitter and said he was “shocked to see how things turned out the way they did.”
Customers fled the exchange fearing whether FTX had enough capital, and they agreed to sell themselves to rival crypto exchange Binance. But the deal fell through pending Binance’s due diligence of the FTX balance sheet.
FTX had valued its assets between $10 billion and $50 billion and listed more than 130 affiliated companies around the world, according to its bankruptcy filing.
— This story originally appeared on nypost.com and has been republished with permission
#Shaquille #ONeal #Gisele #Bundchen #Naomi #Osaka #sued #billion #scheme