In my December newsletter, I talked about FTX crypto exchange founder, Sam Bankman-Fried’s, arrest in the Bahamas and the list of charges from the Department of Justice, SEC and CFTC. SBF is not the only one in legal jeopardy.
Celebrities Tom Brady (geez, he’s had a BAD year, huh?), Larry David and Kevin O’Leary are on the wrong side of legal action, as well.
Days after SBF filed for FTX bankruptcy, attorney Adam Moskowitz of The Moskowitz Law Firm, a South Florida litigation boutique, and Boies Schiller Flexner filed actions in Miami federal and state court against Bankman-Fried and celebrity promoters of the exchange.
The federal class action suits allege that FTX’s yield-bearing accounts (YBAs), which pay interest on crypto holdings, were actually unregistered securities in violation of both state and federal securities laws and that celebrities who promoted them should therefore be on the hook for investor damages.
The Moskowitz action, filed on Nov. 15, claims damages are over $11 billion (yes, with a B).
A separate state action in Florida names Brady, Shark Tank TV personality Kevin O’Leary and former Boston Red Sox star David Ortiz — all Florida residents — as defendants. That suit was filed by the law firm of Boies Schiller, seeking a declaratory judgment on whether FTX YBAs are unregistered securities and if, by extension, celebrity promoters violated consumer laws by promoting them.
Bottom line: let the celebrity endorser … beware. Because they may be the only deep pockets accessible to investors, who likely won’t see a satoshi returned from the bankruptcy proceedings.
Reminder: Do NOT keep your assets on centralized exchanges. They are not banks. They are a marketplace where you trade cryptos. Learn to self-custody your assets. That’s the true power of digital ownership in the new economy.
Learn more in my all new 7-day email short course “Future of Wealth Fundamentals: Your Keys to Succeed in any Market” + get FREE access to my “best of 2022” masterclass replay bank. Sign up now.
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