- FTX users have expanded the list of their targets in seeking to recover $11 billion lost in the exchange’s meltdown.
- The user group filed three complaints against Major League Baseball (MLB), Formula 1 racing, and Mercedes-Benz Group AG’s racing team.
The FTX user group seeking billions of dollars in damages from three dozen celebrities accused of promoting Sam Bankman-Fried’s fallen exchange has added new targets to its legal onslaught.
On November 27, the plaintiffs filed three complaints against Major League Baseball (MLB), Formula 1 racing, and Mercedes-Benz Group AG’s racing team, accusing the parties of “aiding and abetting and/or actively participating in the FTX Group’s massive, multi-billion-dollar global fraud.”
According to a Bloomberg report, the plaintiffs blame MLB, F1, and the Mercedes F1 racing team for helping push the sale of unregulated securities through promotional deals with FTX, causing them to lose $11 billion in the exchange’s meltdown.
Specifically, the plaintiffs faulted the defendants, among other celebrity figures and firms that accorded FTX financial and legal services, for turning a blind eye to red flags about the exchange in pursuit of earnings derived from the public enthusiasm for the alternate currency.
“MLB and many others were quick to jump into the crypto world with both feet when they saw the potential for fast money.” Lawyers representing the plaintiffs argued.
The three separate complaints were consolidated into one class-action lawsuit.
While some previously accused celebrity endorsers have argued that claims by FTX users are meritless because the ads and promos didn’t specifically encourage defendants to deposit funds into FTX, the lead counsel in the latest class-action lawsuit believes the defendants “won’t get away” under the “updated laws for the internet age.”
In an exclusive report, attorney Adam Moskowitz argued that according to a 2022 decision by the 11th Circuit Court of Appeals governing Alabama, Georgia, and Florida, the Securities Act of 1933 required that “promoters using the internet or any other mass media were liable for their customers’ losses, if they provide misleading information.”
Further, Moskowitz stressed that he sued the plaintiffs under a law that draws “extremely punitive penalties” for promotion of unregistered securities.
“Under that law, if the product is found to be an unregistered security and if the promoter had a financial interest, they’re liable regardless of what words they selected in their promotion.” Moskowitz stated.
Based on these arguments, Moskowitz believes the law will find that promoters on social media are liable for clients’ losses, setting a solid legal basis for the lawsuit.