1 of 4 | Tampa Bay Buccaneers quarterback Tom Brady and his ex-wife model Gisele Bundchen are named in a class-action lawsuit over the collapse of crypto exchange FTX. File photo by John Angelillo/UPI |
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Nov. 16 (UPI) -- A number of athletes and celebrities, including Tom Brady, Gisele Bundchen, David Ortiz and Stephen Curry, are facing an $11 billion class-action lawsuit over the collapse of crypto exchange FTX.
The lawsuit, which was filed Tuesday in Florida against FTX founder Sam Bankman-Fried and the company's brand ambassadors who "aggressively marketed the FTX platform," claims FTX used athletes and celebrities to mislead investors, ultimately costing them billions of dollars in damages.
"The deceptive FTX platform maintained by the FTX Entities was truly a house of cards, a Ponzi scheme 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, filed by Edwin Garrison on behalf of himself and others, states.
The suit claims FTX was "designed to take advantage of unsophisticated investors from across the country, who utilize mobile apps to make their investments."
"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," the lawsuit said claiming brand ambassadors should also be held liable.
Brady, the Tampa Bay Buccaneers's quarterback, and his recently divorced wife supermodel Bundchen, filmed a commercial last year as part of a $20 million ad campaign for FTX.
Former Boston Red Sox Hall of Famer Ortiz was also featured in a World Series ad that declared FTX the official crypto exchange of Major League Baseball.
In addition to Brady, Bunchen, Ortiz and Curry, Shaquille O'Neal, Trevor Lawrence and comedian Larry David, whose ad was shown during the Super Bowl, are also named in the suit, as are the Golden State Warriors basketball team which was a visible partner of FTX.
Last week, FTX Group announced it had commenced voluntary Chapter 11 bankruptcy proceedings. The announcement said there were approximately 130 affiliated companies in the FTX Group currently entering bankruptcy proceedings. Bankman-Fried also resigned, with the 30-year-old former CEO announcing on Saturday that he was in the Bahamas.
The House Financial Services Committee announced Wednesday it would hold hearings next month to investigate the collapse of FTX Group. The Committee expects to call Bankman-Fried, as well as other witnesses, according to chairwoman Rep. Maxine Waters, D-Calif.
"The fall of FTX has posed tremendous harm to over one million users," Waters said in a statement, "many of whom were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it all disappear within a matter of seconds."
