FTX ambassadors and promoters face class action lawsuit

by
Crypto Regulation
FTX ambassadors and promoters face class action lawsuit

The class action lawsuit filed last month against a host of FTX promoters for the now-extinct crypto exchange has been amended. Financial watchdogs are seeking billions of dollars from the exchange’s ambassadors to compensate investors.

The class action suit is now in Florida

The Federal Consolidated Action case involves the now-jailed Bankman-Fried and FTX. It is among other related class-action lawsuits that have been brought against the exchange’s promoters.

The complaint, brought in Florida by class action lawyer Adam Moskowitz, is one of the first to try to hold athletes and celebrities who supported cryptocurrencies during the boom years accountable.

The FTX Disaster has been widely acknowledged as the most prominent financial fraud in US history. Billions of dollars have been swindled from investors globally. For many years, FTX will be subject to federal bankruptcy processes. There is no assurance that any of the victims will be able to recover anything from those proceedings. This lawsuit may be their only chance to obtain compensation for their losses.

FTX promoters in trouble

The lawsuit targets FTX ambassadors, both companies and individuals, who publicly marketed the sale of FTX YBAs without properly revealing their compensation or profits from the sales. Regulators are looking to prove they clearly violated FTC, SEC, and other state regulations. This lawsuit also demands that such individuals and companies be held accountable under state and federal laws for promoting unregistered security or misleading ads. With no exceptions, strict responsibility applies to those particular claims.

The filed class action suit stated:

“The plaintiffs’ claims stem solely from the acquisition and investment in a YBA, a holdings-type account with FTX that each user of the FTX app automatically received and which, was guaranteed to generate returns on their sizeable savings in the accounts, regardless of whether those holdings were held as USD, legal tender, or cryptocurrencies, and regardless of whether any trades were made with the assets held in the YBA.”

Some celebrities who supported and marketed FTX were NFL quarterback Tom Brady, comedian Larry David, tennis player Naomi Osaka, Udonis Haslem, Steph Curry, and the National Basketball Association’s Golden State Warriors team. These promoters allegedly attracted inexperienced retail investors who have lost billions of dollars.

Follow Us on Google News

Read more about

Wayne Jones

Wayne is an all-rounded cryptocurrency writer who has written for several publications in the fintech industry. Having graduated from the University of Essex Colchester, he developed a passion for blockchain technology and has been curious about how the blockchain can modify the traditional financial industry.