FTX Lawsuit: Tom Brady, Stephen Curry Sued After FTX Investors Lost Billions

A number of famous people are named in a class-action complaint brought on Tuesday against the bankrupt cryptocurrency exchange FTX and its former CEO Sam Bankman-Fried, including basketball players Shaquille O'Neal and Steph Curry, comedian Larry David, and football great Tom Brady.

Edwin Garrison, an investor in FTX, filed the case on behalf of other FTX investors in the cryptocurrency exchange, whose owners are filing for bankruptcy and liquidating the business, in the US District Court in southern Florida.

Celebrity Promoters Sued After FTX Collapse

The complaint aims to award compensatory damages to former investors who lost money when the market crashed last month in order to hold FTX, Bankman-Fried, and the celebrities who promoted the cryptocurrency exchange "responsible for the many billions of dollars in losses."

Following the loss of billions of dollars on reckless bets by an allied trading company, Alameda Research, Bankman-Fried resigned as CEO of FTX and declared bankruptcy last week. Outrage has been generated by the sudden collapse of one of the biggest cryptocurrency exchanges, and legislators are scheduled to convene a hearing on the subject next month on Capitol Hill.

Losses might be incurred by as many as 1 million individuals who have traded and bought assets on FTX, according to The Hill. One of the business's partners, Gemini, the cryptocurrency startup started by Tyler and Cameron Winklevoss, promptly informed clients that redemptions under its Earn program would be delayed.

In order to assist consumers in withdrawing money from the scheme that allowed them to earn interest on cryptocurrency holdings, Gemini stated it was collaborating with Genesis. The business stated that no other Gemini goods or services were impacted. BlockFi, a significant participant in the cryptocurrency industry, stopped accepting withdrawals last week as FTX started to fall apart.

FTX Bankrupcy

The Wall Street Journal reported on Tuesday that BlockFi was getting ready for a potential bankruptcy petition. Of course, as token prices have fallen over the past year, key participants in the crypto field are scrambling to set themselves apart from FTX and other businesses that have failed.

One is Brian Armstrong, the CEO of publicly listed exchange Coinbase, who said on Wednesday to CNN's Julia Chatterly that while the aftermath is now harming the sector, it may eventually be beneficial for businesses like his. And Bankman-Fried, the creator of FTX who stepped down as CEO last week, is facing increasing legal difficulties.

A FTX investor filed a lawsuit against Bankman-Fried and a number of well-known figures who have supported the platform, including Tom Brady, Gisele Bundchen, and Steph Curry, on Wednesday. "The misleading FTX platform run by the FTX corporations was really a house of cards,"

On behalf of Edwin Garrison, a client of FTX, top attorneys Adam Moskowitz and David Boies filed the lawsuit. A class-action lawsuit against cryptocurrency broker Voyager Digital, which also declared bankruptcy earlier this year, is being lead by Florida attorney Moskowitz, CNN reported.

Furthermore, Boies is most recognized for representing Vice President Al Gore in the Bush v. Gore case from 2000. Moskowitz claimed that FTX was "a massive Ponzi scam greater than the Madoff scheme" in an email to CNN Business. These three are among a select group of well-known players having connections to FTX that also includes David Ortiz of the Boston Red Sox, Trevor Lawrence of the Jacksonville Jaguars, and NBA icon Shaquille O'Neal.

Per CBS Sports, athletes who have invested in other types of crypto are feeling the effects of FTX's downfall since it has had a significant effect elsewhere in the crypto sector.

The Detroit Pistons star Cade Cunningham is expected to lose a sizable sum of money as a result of an agreement with BlockFi that required him to get 100% of his signing bonus in Bitcoin, it was observed after it was revealed that FTX-owned BlockFi is now facing bankruptcy.

Major commercial and sponsorship agreements between FTX and teams and leagues are also in place. The Warriors and FTX signed a $10 million worldwide sponsorship agreement in December, providing the brand a significant presence across Chase Center and the team's NBA 2K and G League squads.

Additionally, FTX was a sponsor of the Mercedes Formula 1 team and owned the naming rights to the Miami Heat's home stadium. The Heat and Miami-Dade County issued a statement on November 11 in which they announced the end of their partnership with FTX and their search for a new naming rights partner for their arena.

Tom Brady's personal and professional bottom lines have recently taken a knock as a result of FTX's collapse and its potential impact on his money. Tom Brady and Bundchen said they had divorced at the end of the previous month.