The downfall of FTX has continued to have a domino effect on the many organizations and individuals financially affiliated with it. When FTX was still among the biggest crypto exchanges, it had advertisement deals with some of America’s biggest pro athletes and celebrities. Now, FTX investors are suing these celebrities for promoting FTX to unsophisticated investors.
The news of FTX investors suing celebrities that promoted the cryptocurrency exchange platform hit earlier this week after a lawsuit was officially filed, as spotted by THR. The suit references how the celebrities encouraged audiences to invest their funds into crypto through FTX, specifically calling out the likes of Tom Brady, Stephen Curry, Larry David, and more. “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,” it reads.
FTX produced several ads that featured the named celebrities promoting the crypto exchange. Most notably, actor Larry David starred in a Super Bowl commercial in which he doubted the legitimacy of crypto. Other celebrities also starred in ads and commercials that aired on television and online. In some of these ads, the celebrities reassured that FTX was completely safe to use, even for those not well-versed in crypto or investing. Now, the lawsuit is calling FTX a ponzi scheme, looking to hold the celebrity endorsers accountable.
It’s been less than a week since FTX filed for Chapter 11 bankruptcy. Shortly thereafter, CEO Sam Bankman-Fried stepped down so that John J. Ray III could handle the bankruptcy process. In the time since we’ve seen TSM and GameStop cut ties, and partner BlockFi follow suit with a bankruptcy filing of its own. As we continue to follow the latest developments with the FTX situation, stick with us here on Shacknews.