More influencers who promoted the now-defunct FTX continue to face lawsuits from aggrieved investors.
A group of well-known YouTubers is facing a class action lawsuit from FTX investors, who claim that the influencers hyped a supposedly fraudulent crypto exchange.
In addition to promoting FTX, the content creators allegedly promoted the exchange’s yield-bearing accounts (YBAs), which the lawsuit claimed were unregistered securities.
YouTubers Allegedly Promoted FTX’s Unregistered Securities
The class action lawsuit, which was filed in the U.S. District Court Southern District of Florida Miami division, alleges that some prominent YouTube influencers pushed the sale of FTX’s YBAs to their millions of followers without disclosing how much they were paid by the exchange.
“Evidence has now been uncovered that reveals Influencers played a major role in the FTX disaster and in fact, FTX could not have arisen to such great heights without the massive impact of these Influencers, who hyped the Deceptive FTX Platform for undisclosed payments ranging from tens of thousands of dollars to multimillion-dollar bribes “
The lawsuit is led by Edwin Garrison, a US citizen and resident of Oklahoma, with other plaintiffs from Canada, Australia, and the United Kingdom. The individuals had YBA accounts with FTX.
Influencers involved in the lawsuit include Kevin Paffrath, Brian Jung, Graham Stephan, Ben Armstrong – popularly known as ‘Bitboy’ – Tom Nash, as well as Erika Kullberg, believed to be the founder of talent management firm Creators Agency, which is also a defendant mentioned in the lawsuit.
According to the lawsuit, Paffrath, Stephan, and Nash removed all videos on their YouTube channel “endorsing FTX and praising Sam Bankman-Fried” after the platform collapsed and instead posted apology videos and acknowledged their part in hyping the collapsed crypto exchange and causing losses worth billions of dollars to investors.
More FTX Influencers Face Lawsuits
National Basketball Association (NBA) champion Shaquille O’Neal and Japanese Tennis athlete Naomi Osaka may be spared from an FTX lawsuit, which accuses sports stars and other celebrities of promoting FTX to investors with little crypto knowledge.
Other known personalities involved in the FTX lawsuit include Tom Brady, Gisele Bündchen, Trevor Lawrence, and Kevin O’Leary.
Shortly after the fall of FTX in November 2022, an individual filed a class action lawsuit against the Golden State Warriors, alleging that San Francisco-based professional basketball team promoted FTX as a safe platform to invest in cryptocurrency.