Altcoins

A new class-action lawsuit targets YouTube influencers for promoting FTX

A class-action lawsuit led by Edwin Garrison has been filed against “FTX influencers” for their alleged role in promoting a massive crypto fraud totaling over $1 billion in damages.

The suit names YouTubers and so-called NFT influencers Kevin Paffrath, Graham Stephan, Andrei Jikh, Jaspreet Singh, Brian Jung, Jeremy Lefebvre, Tom Nash, Ben Armstrong, Erika Kullberg and Creators Agency LLC as respondents, in addition to previous celebrities like Shaquille O’Neal and Tom Brady, who were already named.

The lawsuit names eight YouTubers, along with the talent management company responsible for promoting FTX and the founder of the agency, as defendants. As per the allegations made in the suit:

“Though FTX paid Defendants handsomely to push its brand and encourage their followers to invest, Defendants did not disclose the nature and scope of their sponsorships and/or endorsement deals, payments and compensation, nor conduct adequate (if any) due diligence.”

According to the lawsuit, the defendants are characterized as “influencers” who depict themselves as genuine consumers providing their followers with genuine and valuable information.

Other celebrities caught up in FTX collapse

Meanwhile, despite appearing nightly on TNT’s Inside the NBA, former NBA superstar Shaquille O’Neal has allegedly been dodging papers to appear before the FTX lawsuit.

“A lot of people think I’m involved, but I was just a paid spokesperson for a commercial,” O’Neal told CNBC.

“People know I’m very, very honest,” O’Neal added. “I have nothing to hide. If I was heavily involved, I would be at the forefront saying, ‘Hey.’ But I was just a paid spokesperson.”

Meanwhile, the investor, entrepreneur and Shark Tank television host, Kevin O’Leary, who also endorsed FTX and is a defendant in the lawsuit, revealed on CNBC’s “Squawk Box” that he received $15 million from FTX but lost it all. That sum included $9.7 million he invested with FTX, over $1 million in FTX equity, and roughly $4 million in taxes and agent fees, O’Leary has since clarified.

Previously, O’Leary admitted to forming a close relationship to FTX founder and former CEO Sam Bankman-Fried.

Consolation of suits

Representing the plaintiffs in the case is the Moskowitz Law Firm. The seven plaintiffs, hailing from different countries, have been named in the lawsuit and have all bought an unregistered security from FTX in the form of a yield-bearing account (YBA).

The suit alleges that the plaintiffs have incurred damages due to purchasing the unregistered security, which the defendants promoted for their own or FTX’s financial gain. The lawsuit has identified global and national classes of plaintiffs, which include thousands, if not millions, of consumers worldwide to whom FTX offered and/or sold YBAs.

For his part, Ben Armstrong, aka Bitboy, has stated that he never once promoted FTX and took to Twitter to say that he intends to counter-sue.


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