FTX class action claims influencers played major role in FTX disaster

FTX class action lawsuit overview:

• Who: Plaintiff Edwin Garrison has filed a class action lawsuit against 10 influencers who promoted the FTX platform on their YouTube channels.
• Why: He claims they played a significant role in perpetuating the “largest financial fraud in U.S. history.”
• Where: The FTX class action lawsuit was filed in Florida federal court.

Several “influencers” are facing an FTX class action lawsuit alleging they played a role in the “largest financial fraud in U.S. history.”

FTX was a centralized cryptocurrency platform that specialized in derivatives and leveraged products, the FTX class action lawsuit explains. Sam Bankman-Fried, the former CEO of FTX, is currently facing criminal charges over the FTX disaster, which has reportedly caused billions of dollars to be stolen from investors globally.

In November 2022, FTX filed for bankruptcy. “There is no guarantee that any of the victims will be able to see any recovery from those proceedings,” plaintiff Edwin Garrison alleges.

Garrison filed the FTX class action lawsuit because he says it may be one of the only methods for victims to recover any of their losses.

He names 10 influencers as defendants in the FTX class action lawsuit, claiming that they played a significant role in the FTX disaster by promoting the cryptocurrency platform on their YouTube channels.

Garrison says FTX could not have achieved its massive success without the influencers’ hyping the cryptocurrency platform for undisclosed payments “ranging from tens of thousands of dollars to multimillion dollar bribes.”

FTX class action says crypto platform deceptively marketed investments on platform as safe

The FTX class action lawsuit claims that FTX marketed yield-bearing accounts as a type of savings account that was guaranteed to generate returns on investors’ holdings.

“FTX’s fraudulent scheme was designed to take advantage of investors from across the globe, including specifically in Florida, who sought out what was represented to be a safe platform to make their investments in the burgeoning cryptocurrency industry,” Garrison alleges.

Garrison says he purchased an unregistered security in the form of a yield-bearing account, funding the account with enough crypto assets to earn interest on his holdings. He says he relied on the defendants’ misrepresentations and omissions about the FTX platform.

Garrison filed the FTX class action lawsuit on behalf of a global class and nationwide class of persons and entities who purchased or enrolled in a yield-bearing account during the applicable limitations period. Garrison also seeks to represent a Florida subclass.

The FTX class action lawsuit asserts claims for violations of the Florida Securities and Investor Protection Act, the Florida Deceptive and Unfair Trade Practices Act, civil conspiracy, and declaratory judgment.

Garrison previously filed an FTX disaster class action lawsuit against Bankman-Fried and celebrity endorsers including Tom Brady and Stephen Curry.

How have you been affected by the FTX disaster? Tell us about it in the comments!

Garrison is represented by Adam M. Moskowitz and Joseph M. Kaye of The Moskowitz Law Firm PLLC, Stuart Z. Grossman and Manuel A. Arteaga-Gomez of Grossman Roth Yaffa Cohen PA, Stephen Neal Zack and Tyler Ulrich of Boies Schiller Flexner LLP, and Jose Ferrer and Michelle Genet Bernstein of Mark Migdal Hayden LLP.

The FTX disaster class action lawsuit is Edwin Garrison v. Kevin Paffrath, et al., Case No. 1:23-cv-21023, in the U.S. District Court for the Southern District of Florida, Miami Division.

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