FTX Founder and Celebrity Backers Sued Amid Crypto Collapse
Larry David, Tom Brady and Shaquille O'Neal are named among the defendants named in a class action lawsuit over the cryptocurrency platform's downfall.
The complaint, which was filed on 15 November in Florida federal district court on behalf of FTX users, names these celebrities and others alongside founder and former CEO Sam Bankman-Fried.
The lawsuit alleges that the defendants each “either controlled, promoted, assisted in, [or] actively participated in FTX Trading” to encourage investment in the platform, which the suit refers to as a “Ponzi scheme”.
Alleging that defendants stand to lose $11 billion from FTX’s collapse, the suit seeks unspecified monetary damages.
FTX filed for Chapter 11 bankruptcy in the US on 11 November. Bankman-Fried resigned as CEO on the same day, following a week of turmoil regarded as the biggest collapse in the crypto sphere to date as the platform’s users rushed to withdraw more than $6 billion within 72 hours. Rival Binance abandoned a proposed rescue deal.
Many of the company’s celebrity advocates have since sought to distance themselves from the brand, with Brady deleting a number of tweets tagging Bankman-Fried and the Miami Heat basketball team removing the FTX logo from the roof of its home court.