Influencers Sued in a $1 Billion Class Action for Allegedly Promoting FTX

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Retail investor Edwin Garrison has filed a complaint against some influencers for their role in the promotion of the now-defunct crypto exchange FTX.

The suit totaled over $1 billion in damages and named eight YouTubers as defendants in the complaint, along with the talent agency that promoted FTX and the firm’s CEO.

Popular Figures Caught Up in FTX Collapse

A group of investors who invested with the now-defunct cryptocurrency exchange FTX has filed a class action lawsuit against several online influencers.

The lawsuit was received on March 15 in the Southern District of Florida, Miami Division.

The file alleged they misled their viewers and followers about unregistered securities in order to promote the exchange.

Edwin Garrison, a resident of Oklahoma, led the lawsuit, which totaled over $1 billion in damages. The plaintiffs in the complaint, which was filed in Florida’s Southern District Miami Division Court, also include citizens of the UK, Canada, and Australia.

Eight YouTubers, the talent agency that promoted FTX and the firm’s founder, are the defendants.

In addition to previously named celebrities like Shaquille O’Neal and Tom Brady, the lawsuit 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.

According to the claims in the lawsuit, FTX paid the defendants handsomely to promote its brand and persuade followers to invest. 

However, the defendants failed to disclose the details of their sponsorship or endorsement agreements, the sums involved, and their other benefits, nor did they carry out sufficient due diligence.

The defendants are described in the case as influencers who portray themselves as real customers and give their followers real and useful information.

However, following the collapse of FTX, several defendants in the case allegedly scrubbed their YouTube channels of all video clips advocating FTX and praising Sam Bankman-Fried and replaced them with apologetic films.

The lawsuit contends that YouTube played an important role in promoting FTX, given that YouTube is more well-known than network television. 

However, ex-NBA superstar Shaquille O’Neal is said to be avoiding signing papers to participate in the FTX lawsuit despite appearing every night on TNT’s Inside the NBA. 

He asserts that he was only a hired spokesperson and had nothing to hide.

Aside from him, BitBoy Crypto creator Ben Armstrong also claims to have never promoted FTX and promised to countersue on his Twitter page. Others have also claimed innocence or flatly refused to comment. 

The plaintiffs, all from different countries, are being represented by the Moskowitz Law Firm. 

Cumulation of All Lawsuits 

Former FTX CEO, Sam Bankman-Fried, has previously been named in seven class action lawsuits since the bankruptcy of FTX, pushing up the number of lawsuits against him since the collapse of his crypto empire.

These cases also stand apart from other numerous inquiries and investigations looking into the action of FTX and Sam Bankman-Fried

Some of these include the rumored market manipulation investigation by federal prosecutors and a probable investigation by the Federal Election Commission into Bankman-Fried’s shady money contributions to the Republican Party.

This recent lawsuit consolidates the former case against the FTX founder. 

FTX, previously one of the biggest crypto exchanges, collapsed last year in November after a run on the exchange was started by a sharp decline in its native token, FTT. 

The fact that FTX failed to respect customer withdrawals and was thus forced to file for Chapter 11 bankruptcy showed that it did not retain one-to-one reserves of customer assets.

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