Sam Bankman-Fried, Tom Brady and Steph Curry named in lawsuit over FTX collapse

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Sam Bankman-Fried, former CEO of the bankrupt crypto exchange FTX, has had a good few weeks.

The crypto expert known as SBF has seen his company go bankrupt and his net worth drop by billions of dollars, and now he’s been named in a class action lawsuit over the collapse of FTX.

The lawsuit names Bankman-Fried along with several other high-profile shareholders in FTX, including Tom Brady, Steph Curry and Kevin O’Leary, and was filed on behalf of Oklahoma resident Edwin Garrison in U.S. District Court for the Southern District. from Florida. The lawsuit is seeking $11 billion in damages.

The lawsuit states that the celebrities and Bankman-Fried are “responsible for the many billions of dollars in damages they caused to plaintiff and the classes” and aims to “force defendants to make them whole.”

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See also: Why do people invest in crypto? “It’s part deceit and part delusion,” says Charlie Munger.

“The misleading and failed FTX platform was based on false statements and deceptive conduct,” the 41-page lawsuit reads. “While many incriminating FTX emails and texts have already been destroyed, we found them and they prove how FTX’s fraudulent scheme was designed to take advantage of inexperienced investors across the country, who use mobile apps to manage their investments. to do.”

Brady and Curry became ambassadors for FTX in 2021 and received shares in the company. Both athletes also appeared in several commercials for the crypto exchange. It’s unclear what will happen to the money investors put into FTX, but any equity could be wiped out by the bankruptcy filing.

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Representatives for Curry, Brady and FTX did not respond to MarketWatch’s request for comment on this story.

“There are famous CEOs in this space, as well as famous crypto entrepreneurs,” Gary Gensler, chairman of the Securities and Exchange Commission, said on TBEN last week after news of FTX’s liquidity problems broke but ahead of the announcement of the bankruptcy. “The public can fall prey to their promotions, their marketing and the like.”

FTX halted withdrawals last week amid a multi-billion dollar liquidity crisis. At one point, rival crypto exchange Binance was interested in acquiring FTX, but decided against the move, calling FTX’s financial problems “beyond our control or ability to help.”

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Some FTX users were able to withdraw their money from the exchange before it went bankrupt, but many others were not, as Marketwatch’s Frances Yue reports.

See also: ‘The Big Short’ author Michael Lewis has been on a trip with Sam Bankman-Fried and is set to write a new book about the collapse of FTX

On Wednesday, the House Financial Services Committee announced plans to hold a hearing on FTX’s collapse and said it “expects” to hear from Bankman-Fried.

BTCUSD from Bitcoin,
-1.76%
price has dropped more than 70% in the past year, and the price for ether ETHUSD,
-2.56%
has also fallen by more than 70% in the same period.