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FTX bankruptcy class action lawsuit overview:
- Who: Edwin Garrison filed a class action lawsuit against FTX founder Sam Bankman-Fried and a number of celebrity endorsers, including Tom Brady and Stephen Curry, among others.
- Why: Garrison argues cryptocurrency platform FTX engaged in unlawful and deceptive conduct that harmed investors.
- Where: The class action lawsuit was filed in Florida federal court.
FTX founder and former CEO Sam Bankman-Fried, along with a slew of celebrity endorsers, made false representations and engaged in deceptive conduct that harmed investors who used the FTX cryptocurrency trading platform.
Plaintiff Edwin Garrison claims Bankman-Fried, along with celebrities such as Tom Brady, Stephen Curry, Giselle Bundchen and Shaquille O’Neal, helped perpetrate a “fraudulent scheme.”
Garrison argues FTX designed the alleged scheme to “take advantage of unsophisticated investors from across the country who utilize mobile apps to make their investments” and resulted in more than $11 billion in damages.
“The Deceptive and failed FTX Platform was based upon false representations and deceptive conduct,” the FTX class action states.
The FTX platform “imploded” earlier this month, and its more than $30 billion in total value “evaporated almost overnight,” leading it to file for Chapter 11 bankruptcy, according to the FTX class action.
FTX class action claims crypto platform was ‘house of cards,’ ‘Ponzi scheme’
Garrison claims FTX was a “house of cards” and a “Ponzi scheme” that saw the platform shuffle customers’ funds “between their opaque affiliated entities, using new investor funds.”
FTX used newly invested funds “to pay interest to the old ones and to attempt to maintain the appearance of liquidity,” the FTX class action alleges.
Garrison argues FTX used well-known celebrity endorsers to raise funds and drive American consumers to invest.
Further, Garrison claims the celebrity endorsers “never disclosed the nature, scope and amount of compensation they personally received in exchange for the promotion of the Deceptive FTX Platform.”
Garrison claims FTX is guilty of civil conspiracy and in violation of the Florida Securities and Investor Protection Act. He demands a jury trial and requests declaratory and injunctive relief along with an award of actual, direct and compensatory damages for himself and all class members.
Garrison wants to represent a nationwide class and Florida subclass of investors who purchased or enrolled in a yield-bearing account (YBA) with FTX.
Did you use the FTX platform to invest in cryptocurrency assets? Let us know in the comments!
The plaintiff is represented by Adam M. Moskowitz and Joseph M. Kaye of The Moskowitz Law Firm, PLLC, and David Boies, Alex Boies and Stephen Neal Zack of Boies Schiller Flexner LLP.
The FTX bankruptcy class action lawsuit is Garrison v. Sam Bankman-Fried, et al., Case No. 1:22-cv-23753, in the U.S. District Court for the Southern District of Florida.
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