Above all else, FTX advertisements wanted you to know two things: that cryptocurrency is a force for good, and that you don't need to be an expert to buy and trade it. In fact, you don't even have to understand it at all. You just need to get involved, because if you don't, you'll get left behind.
If a bit cheesy then, those same promotions — an array of of television commercials, social media posts, and print ads featuring an impressive lineup of A-list celebrities and athletes, in addition to appearances by the now-bankrupt exchange's ex-CEO Sam Bankman-Fried — are surreal, if not troubling, to watch now, roughly a week after the exchange's spectacular collapse.
Bankman-Fried, widely believed to be the cryptosphere's alleged savior, is under investigation by both the SEC and the CFTC, having lost virtually all his personal wealth in a single day. Meanwhile, an estimated $11 billion's worth of user funds — including that of the retail investors targeted by those shiny ads, many of whom have lost their savings — have vanished. But just six or so months ago? Unretired Buccaneers quarterback Tom Brady was asking people if they were "in"; basketball star Steph Curry coolly told users that, like him, they didn't need to be a crypto "expert" to invest in digital assets; comedian Larry David told retail investors to ignore their crypto-skepticism; supermodel Gisele Bündchen, in a print campaign with Bankman-Fried, promised that she and FTX would save the world.
"The blood's on [Sam Bankman-Fried's] hands," Joseph Kaye, a Partner at the Moskowitz Law Firm in Florida, told Futurism. "And as far as we're concerned, it's on the hands of anybody who has been promoting this product."
Kaye's firm, alongside that of New York's David Boies, is representing thousands of dismayed FTX retail investors in a class action lawsuit filed this week against FTX, its founder, and its many celebrity sponsors, accusing those named of intentionally preying on low-information investors.
Of course, consuming a celebrity endorsement is like breathing air at this point. They're soaked into every corner of the culture, and most every public figure has their influencing hustle — makeup, clothes, shoes, cars, gummies and the like. And sure, a fair share of celebs have inspired rage over, say, Instagram posts touting diet suppressant lollipops.
FTX accounts, however, are a different story. You'd be hard-pressed to find someone who bought a celeb-endorsed lollipop and woke up to find thousands — if not millions — of their savings gone, and a balance sheet marking an eight billion dollar hole to show for it.
Like the now-also-defunct Voyager Digital's Earn Program, FTX accounts were yield-bearing, promising its investors high returns for their investments — so, basically, the markings of a security, just without the actual label. (The Moskowitz firm is also representing plaintiffs in a class action suit brought against Voyager and Mark Cuban, billionaire of "Shark Tank" fame.)
"A lot of people get confused and think that 'oh, well, investing in cryptocurrency is inherently risky,'" Kaye said. "But the issue here is not so much 'did they make an investment in cryptocurrency. It's the function of the account."
And while that's risky enough to begin with, it now appears that FTX — which hasn't officially been charged with anything yet — was using its investors' cash like a piggy bank, funding its own lending activities with the user money with which it'd been trusted.
"When you make statements like [those celebrities did] — and you don't disclose how much you're making or what your arrangement with them is — and it ends up being an unregistered security," Kaye continued, "you're liable as a promoter to the same extent as if you're the FTX exchange."
No one's saying that Brady or Bündchen or anyone else knew that FTX was potentially involved in any malpractice. They were likely taken in by Bankman-Fried's efforts to build a reputation for himself as Mr. Trustworthy Crypto Man, which he admitted shortly after the collapse had largely been a "front." It's also unlikely that they knew, or even really understood, that they were or could be hawking what might just shake out to be an unregistered security.
That's exactly the point, though. We believe, as they told us, that they weren't "experts." Not in the slightest. There doesn't appear to have been much — if any — due diligence here, and a lot of real people have been badly hurt because of it. Did Curry stand on a street corner and hand out FTX accounts? No, but it can be argued that he and the other figures named in the suit played a serious role in FTX's adoption by the masses, downplaying the instability and messiness of the blockchain world while promising that FTX had their back.
And considering how central they may have been to FTX's rise, it would be heartening to see them take some kind of responsibility after its fall.
"I remember our first meeting and we were speaking to the FTX guys… They started to explain it to us and I said, 'I don't know if you can tell over Zoom when our eyes glazed over, but I still don't understand it," David told The Hollywood Reporter back in February, shortly after his Super Bowl commercial aired. "But that's OK. I don't have to know everything.'"
More on the FTX fallout: Politicians Refuse to Say Whether They'll Give Back Donations From Sam Bankman-Fried
The post Behind the Lawsuit Against Celebs Who Shilled FTX Before Its Spectacular Meltdown appeared first on Futurism.
Read more:
Behind the Lawsuit Against Celebs Who Shilled FTX Before Its Spectacular Meltdown
- Exercise Helps Heart Disease Patients Live Longer - November 8th, 2009 [November 8th, 2009]
- If You Have A Heart Attack, Dial 911, Don't Drive To The ER - November 8th, 2009 [November 8th, 2009]
- Dried Plums, Tart Cherries, Grapes- What do they have in common? - November 8th, 2009 [November 8th, 2009]
- Vitamin D for Me! - November 8th, 2009 [November 8th, 2009]
- Bangkok Hospital Named Best Global Hospital - November 8th, 2009 [November 8th, 2009]
- 10 Years of Stem Cell Science? Where's the Beef? - November 8th, 2009 [November 8th, 2009]
- Women Underestimate Heart Disease Risks - November 8th, 2009 [November 8th, 2009]
- A Stem Cell First- New Organ Created and Transplanted Using Adult Stem Cells - November 8th, 2009 [November 8th, 2009]
- Stem Cells Injected Directly Into the Heart- Sounds Familiar - November 8th, 2009 [November 8th, 2009]
- Heart Disease and Depression Are Linked - November 8th, 2009 [November 8th, 2009]
- TheraVitae Wishes Everyone A Happy Thanksgiving - November 8th, 2009 [November 8th, 2009]
- VesCell Adult Stem Cells Helping Pulmonary Hypertension - November 8th, 2009 [November 8th, 2009]
- VesCell Adult Stem Cells Help Dilated Cardiomyopathy Patient - November 8th, 2009 [November 8th, 2009]
- Another Dilated Cardiomyopathy Patient Helped by VesCell Adult Stem Cells - November 8th, 2009 [November 8th, 2009]
- Clinical Data of VesCell Used On Heart Disease Patients - November 8th, 2009 [November 8th, 2009]
- Results of Patients Treated with Adult Stem Cells for Heart Disease - November 8th, 2009 [November 8th, 2009]
- Results of Doctor Using VesCell for Heart Disease Published in Medical Journal - November 8th, 2009 [November 8th, 2009]
- Stem Cells from VesCell Help Another Patient With Congestive Heart Failure - November 8th, 2009 [November 8th, 2009]
- VesCell Uses Adult Stem Cells Not Fetal Stem Cells - November 8th, 2009 [November 8th, 2009]
- Dilated Cardiomyopathy Continues Improving After Stem Cell Therapy - November 8th, 2009 [November 8th, 2009]
- American Doctors Form Group to Oppose FDA's Stance On Adult Stem Cells - November 8th, 2009 [November 8th, 2009]
- Adult Stem Cell Pioneer Passes Away - November 8th, 2009 [November 8th, 2009]
- Dilated Cardiomyopathy Patient Celebrates His 1 Year Stem Cell Treatment Anniversary - November 8th, 2009 [November 8th, 2009]
- Vescell Featured In Forbes Magazine! - November 8th, 2009 [November 8th, 2009]
- Adult Stem Cells Repair Damaged Heart Muscle - November 8th, 2009 [November 8th, 2009]
- No Scooter Needed for Schlueter- Heart Disease Patient Back in Gym After Stem Cell Treatment - November 8th, 2009 [November 8th, 2009]
- Stem cells provide second chance - November 8th, 2009 [November 8th, 2009]
- Adult Stem Cell Therapy Scientific Advisory Board - November 8th, 2009 [November 8th, 2009]
- Partner hospitals give Heart Disease treatment with Adult Stem Cell Therapy - November 8th, 2009 [November 8th, 2009]
- Stem Cell Treating Physicians for Heart Disease - Vescell by Theravitae - November 8th, 2009 [November 8th, 2009]
- Heart Disease Treatment FAQs - Adult Stem Cells Treats Heart Disease - November 8th, 2009 [November 8th, 2009]
- Checklist of 12 Must-Ask Questions for Overseas Treatment - November 8th, 2009 [November 8th, 2009]
- Health teaching for patients with heart disease | VesCell adult stem cell therapy - November 8th, 2009 [November 8th, 2009]
- Ethical Debates Adult Stem Cell Research | VesCell adult stem cells treatment - November 8th, 2009 [November 8th, 2009]
- Heart disease and health policy and nurse | VesCell adult stem cells treatment - November 8th, 2009 [November 8th, 2009]
- After Stent Symptoms | VesCell Adult Stem Cell Therapy - November 8th, 2009 [November 8th, 2009]
- What is adult stem cell research | VesCell Adult Stem Cell Therapy - November 8th, 2009 [November 8th, 2009]
- Alternative Medicine for Coronary Artery Disease | VesCell Adult Stem Cell Therapy - November 8th, 2009 [November 8th, 2009]
- Diabetic, Seven Heart Attack Patient Experiences on Adult Stem Cell Treatment - November 8th, 2009 [November 8th, 2009]
- Congestive Heart Failure and Life Expectancy | VesCell Adult Stem Cell Therapy - November 8th, 2009 [November 8th, 2009]
- Chest Pain After Angioplasty with Stent | VesCell adult stem cells treatment - November 8th, 2009 [November 8th, 2009]
- Use of Stem Cells for Heart Repair | VesCell Adult Stem Cell Therapy - November 8th, 2009 [November 8th, 2009]
- Women health heart attack - November 8th, 2009 [November 8th, 2009]
- Health Facts on the Heart | VesCell Adult Stem Cells Treatment - November 8th, 2009 [November 8th, 2009]
- The Process of Stem Cells | VesCell Adult Stem Cells Treatment - November 8th, 2009 [November 8th, 2009]
- Rest Pain Leg | VesCell adult stem cells for peripheral artery disease - November 8th, 2009 [November 8th, 2009]
- Health Supplements Heart Diabetes | VesCell Adult Stem Cells Treatment - November 8th, 2009 [November 8th, 2009]
- Heart Failure Epidemic | VesCell adult stem cells treatment - November 8th, 2009 [November 8th, 2009]
- Heart Muscle Health Aspects | VesCell adult stem cell therapy - November 8th, 2009 [November 8th, 2009]
- adult stem cells | VesCell adult stem cells treatment - November 8th, 2009 [November 8th, 2009]
- Updated article about adult stem cells therapy, VesCell, as featured in Forbes Magazine - November 8th, 2009 [November 8th, 2009]
- Forbes: Vescell Stem Cell Therapy Saves Heart Failure Patient - November 8th, 2009 [November 8th, 2009]
- Foetal Stem Cells Offer Hope for Stroke Victims - November 8th, 2009 [November 8th, 2009]
- Stem cells could spell end for diabetes jabs - November 8th, 2009 [November 8th, 2009]
- Full text answers about stem cell research - November 8th, 2009 [November 8th, 2009]
- Stem Cell Transplant from Umbilical Cord Blood Is The Only Hope for SCID Sufferer - November 8th, 2009 [November 8th, 2009]
- New Studies About Umbilical Cord Blood And Children With Diabetes - November 8th, 2009 [November 8th, 2009]
- Engineered Blood Vessels Function Like Native Tissu - November 8th, 2009 [November 8th, 2009]
- Umbilical Cord Blood Stem Cells Provide Hope for Life Threatening Diseases - November 8th, 2009 [November 8th, 2009]
- Gov. Schwarzenegger Signs SB962 to Create a System to Collect and Store Umbilical Cord Blood - November 8th, 2009 [November 8th, 2009]
- Baby Boy Treated for Cerebral Palsey with His Own Cord Blood Stem Cells - November 8th, 2009 [November 8th, 2009]
- Cord Blood May Preserve Insulin Production in Newly Diagnosed Children With Type 1 Diabetes - November 8th, 2009 [November 8th, 2009]
- A "Holy Grail" Of Healing, CBS Evening News - November 8th, 2009 [November 8th, 2009]
- After Receiving Unusual Stem Cell Transplant, Coppell Toddler Comes Home from Hospital - November 8th, 2009 [November 8th, 2009]
- Stem Cell Hope for Bone Fractures - November 8th, 2009 [November 8th, 2009]
- Cord Blood Stem Cells And Cardiovascular Disease - November 8th, 2009 [November 8th, 2009]
- Creating a Cord-Blood Lifeline - November 8th, 2009 [November 8th, 2009]
- Saving Cord Blood - November 8th, 2009 [November 8th, 2009]
- Stem Cell Implant to the Brain Helps Improve Parkinson's Symptoms: Presented at SIR - November 8th, 2009 [November 8th, 2009]
- Governor Rendell Signs Bill Into Law - November 8th, 2009 [November 8th, 2009]
- Curing Blood Diseases: How Cord Blood Saves Lives - November 8th, 2009 [November 8th, 2009]
- Cord Blood Registry Gains Momentum in First Quarter; Forecasts Strong Enrollment Growth in 2008 - November 8th, 2009 [November 8th, 2009]
- Study findings from University of Florida, Department of Pediatrics provide new insights into cord blood - November 8th, 2009 [November 8th, 2009]
- Cord Blood Can Be Used To Treat Adult Leukemia - November 8th, 2009 [November 8th, 2009]
- Umbilical cord a lifeline for 2 kids - November 8th, 2009 [November 8th, 2009]
- For Stem Cells, a Role on the Battlefield - November 8th, 2009 [November 8th, 2009]
- Cochlear Repair After Transplant Of Human Cord Blood Cells May Make Hearing Restoration Possible - November 8th, 2009 [November 8th, 2009]
- About Stem Cells - November 8th, 2009 [November 8th, 2009]
- Stem cells: Small wonders - November 8th, 2009 [November 8th, 2009]
- Stem Cell Therapy Lessens Damage Caused By Stroke - November 8th, 2009 [November 8th, 2009]