Jailed FTX founder Sam Bankman

Release time：2024-05-21 06:53:18 Source：Stellar Space news portal

Fallen cryptocurrency wunderkind Sam Bankman-Fried, who is currently serving a 25-year prison sentence following a sweeping fraud case, has agreed to cooperate in a class-action lawsuit against celebrities who promoted his crypto exchange.  

By agreeing to cooperate with the investors, the victims will now drop their civil liability claims against the felon founder.

The celebrities include some big name sports stars including Tom Brady, Shaquille O'Neal, Stephen Curry and Shohei Ohtani.

Brady's ex-wife Gisele Bundchen and actor Larry David are also among the names accused of promoting unregistered securities for FTX and enticing investors into a Ponzi scheme.

The lawsuit claims crypto Bankman-Fried and the celebrities he recruited to endorse the firm are responsible for around $11 billion of losses to American consumers.

Former FTX chief, Sam Bankman-Fried, who is currently serving 25 years behind bars has reached an agreement with investors to settle their civil claims

Bankman-Fried will cooperate in a class-action lawsuit targeting celebrities including Tom Brady and Gisele Bundchen who promoted FTX, with the aim of resolving current and future civil claims

Bankman-Fried is pictured with Bundchen at a Crypto Bahamas conference in April '22

Many of the stars were 'ambassadors' for the trading platform, while others appeared in prime-time commercials. 

The plaintiffs hope they might be able to recover some of their losses following the  collapse of FTX in November 2022. 

Bankman-Fried, 32, appealed his federal conviction earlier this month after US District Court Judge Lewis Kaplan set the prison term and ordered him to pay $11 billion in forfeiture.

In return for dropping him from the civil lawsuit, Bankman-Fried would hand over all nonprivileged documents detailing his assets and his investment in artificial intelligence start-up Anthropc, an affidavit certifying his net worth as negative and documents about other defendants in the wide-ranging civil litigation.

Bankman-Fried has also agreed to divulge any information he can about venture capital firms that invested in FTX together with a list of accountants and lawyers that worked with the exchange.

Tom Brady and now ex-wife Gisele Bundchen appeared in an FTX commercial in 2022. They're named in a class action lawsuit which alleges the firm's collapse has cost consumers $11 billion

Brady was filmed at home calling around his friends to sign them up with FTX. The company marketed the ad campaign with the slogan: 'Tom Brady is in. Are you?'

Larry David starred in a multimillion dollar Super Bowl ad in which he rejected cryptocurrency before viewers were told: 'Don't be like Larry.'

David portrays a number of characters who reject inventions and ideas including the lightbulb, the toilet and space travel. He then rejects FTX - before viewers are told: 'Don't be like Larry.'

It's not clear what liability any superstar endorsement might be liable for given that Bankman-Fried paid the celebrities to boost the profile of his crypto empire.

Pro football quarterback Trevor Lawrence received $500,000 payment in September 2022, reports Bloomberg.

The celebrities are described in the 41-page as 'parties who either controlled, promoted, assisted in, and actively participated in' FTX's operations, allegedly in breach of Florida law.

The suit adds: 'The Deceptive and failed FTX Platform was based upon false representations and deceptive conduct.

'Although many incriminating FTX emails and texts have already been destroyed, we located them and they evidence how FTX's fraudulent scheme was designed to take advantage of unsophisticated investors from across the country, who utilize mobile apps to make their investments.

'As a result, American consumers collectively sustained over $11 billion dollars in damages.'

Steph Curry's advert showed him telling viewers: 'I'm not an expert and I don't need to be, with FTX I have everything I need to buy, sell, and trade crypto safely.'

Shaq donned an FTX-branded sweater as he said: 'Hey it's Shaquille O'Neal and I'm excited to be partnering with FTX to help make crypto accessible to everyone. I'm all in, are you?'

Tennis star Naomi Osaka said in her commercial: 'I'm proud to partner with FTX. Making cryptocurrency accessible is a goal that FTX and I striving towards.'

NFL star Brady and Bundchen, his supermodel ex-wife, are named as FTX ambassadors who 'joined the company's $20-million ad campaign in 2021'  and starred in a commercial 'showing them telling acquaintances to join the FTX platform'.

Basketballer Curry is singled out for appearing in an ad campaign in which he said he didn't need to be an expert in crypto because 'with FTX I have everything I need to buy, sell, and trade crypto safely'.

David appeared in a Super Bowl commercial for FTX which showed him portraying a series of clueless characters as they reject bright ideas through history, including the toilet and the lightbulb.

The ad then showed David reject FTX, before a message appears: 'Don't be like Larry.'

Shaquille O'Neal also appeared in an FTX commercial, as did Steph Curry. Osaka was an 'ambassador' for the company.

The lawsuit states: '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 YBAs [yield-bearing accounts] and loans to pay interest to the old ones and to attempt to maintain the appearance of liquidity.

'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 in the [yield-bearing accounts], which were offered and sold largely from the FTX Entities' domestic base of operations here in Miami, Florida, pouring billions of dollars into the Deceptive FTX Platform to keep the whole scheme afloat.' 

The suit was filed in the US District Court's Southern District of Florida.

Bankman-Fried had soared to the top of the crypto world, becoming a billionaire before age 30 and turning FTX, a small start-up he cofounded in 2019, into the world's second largest exchange platform.

But in November 2022, Bankman-Fried's breakneck rise came crashing down, with a deluge of customer withdrawals and revelations that billions of dollars had been illegally moved from FTX to Bankman-Fried's personal hedge fund, Alameda Research.

He was convicted by a federal jury in New York in November 2023 on seven counts of fraud, embezzlement and criminal conspiracy.

Sam Bankman-Fried appeared in federal last month where he was sentenced to 25 years in prison for scamming people out of billions of dollars

Bankman-Fried was the poster child for crypto quickly becoming the face of the currency and its rapid rise

During last month's sentencing hearing, Bankman-Fried expressed regret about the firm's demise, which also affected many colleagues.

'It haunts me every day,' he said. 'I made a series of bad decisions.'

But the judge said Bankman-Fried had not fully accepted responsibility.

Bankman-Fried said 'mistakes were made, but never a word of remorse for the commission of a terrible crime,' said Kaplan, who characterized the violations as 'brazen' and called out SBF for his 'exceptional flexibility' towards the truth.

'Since the collapse of FTX, Mr Bankman-Fried has been singularly focused on returning the estate's assets to customers, who could and should be made whole as of current prices,' said Mark Botnick, a spokesman for Bankman-Fried.

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