According to a class-action lawsuit filed on Tuesday, the cryptocurrency exchange FTX and its former CEO Sam Bankman-Fried broke Florida law, deceived clients, and caused investors billions of dollars in losses.
Along with these individuals, the complaint also targets Golden State Warriors player Stephen Curry, billionaire Kevin O’Leary, and ex-wife of Tampa Bay Buccaneers quarterback Tom Brady, supermodel Gisele Bündchen.
The lawsuit accuses the exchange of preying on “unsophisticated investors from around the country” and claims that U.S. consumers suffered $11 billion in damages.
Regulators scrutinized the accounts that many cryptocurrency companies, including FTX, offered to give users a return on money held on their platforms.
BlockFi, a different cryptocurrency platform, settled charges with the Securities and Exchange Commission early this year by paying a $100 million fine to resolve the matter.
Garrison claims he lost money as a result of the cryptocurrency exchange being compelled to halt customer withdrawals.
According to the lawsuit, FTX’s plan included hiring celebrities “to collect funds and drive American customers to invest in the YBAs” to maintain the exchange.
The lawsuit holds Bankman-Fried and the plethora of famous people who supported the business responsible for the damages incurred by the investors.
Larry David, the star of “Curb Your Enthusiasm,” who appeared in a Super Bowl ad for FTX, is also mentioned in the case.
In this case, the Golden State Warriors are also mentioned because they collaborated with FTX this year and unveiled the company’s emblem on the floor at the Chase Center, where the team plays.
The suit says that Garrison, from Oklahoma, put his trust into the company “after being exposed to some or all of Defendants’ misrepresentations and omissions regarding the Deceptive FTX Platform … and executed trades on the Deceptive FTX Platform in reliance on those misrepresentations and omissions.”
“As a result, Plaintiff Garrison has sustained damages for which Defendants are liable,” it reads.
The lawsuit is yet another setback for the troubled business, which was once allegedly worth $32 billion. Bankman-Fried resigned as CEO last week, and FTX disclosed that it had filed for Chapter 11 bankruptcy, which enables a corporation to reorganize and continue operating while it develops a strategy to pay back its creditors.
The bankruptcy would be handled with the utmost thoroughness and transparency, John J. Ray, the new CEO of FTX Group, assured “every employee, customer, creditor, contract party, stockholder, investor, governmental authority and other stakeholders.”
FTX is now under investigation by the Securities and Exchange Commission and Justice Department.
