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A consortium of investors has sued the founder of FTX — along with several high-profile athletes who promoted the cryptocurrency exchange — alleging they took “advantage of unsophisticated investors from across the country.”
Included in the class-action suit are FTX founder Sam Bankman-Fried, in addition to seven-time Super Bowl champ Tom Brady, NBA superstar Steph Curry, and NBA legend Shaquille O’Neal.
- The suit alleges the defendants “made numerous misrepresentations” about FTX.
- It claims U.S. consumers collectively sustained more than $11 billion in damages.
- The Golden State Warriors were also included in the complaint.
Last week, FTX — along with West Realm Shires Services Inc., Alameda Research Ltd., and roughly 130 affiliated companies — filed for bankruptcy.
As recently as January, FTX had raised $400 million in a Series C funding round, valuing the company at $32 billion.
Free Fall
FTX’s bankruptcy has led to the demise of several sports-related deals.
The Miami Heat and Miami-Dade County ended its 19-year, $135 million naming rights deal secured in March 2021. FTX had paid Miami-Dade County $20 million to date, and its contract with the team and county requires the exchange to pay $16.5 million if it faces an “insolvency event.”
The Mercedes-AMG Petronas Formula 1 team suspended its deal with FTX, and esports organization TSM — the most valuable esports company in 2022 at $540 million — has also decided to suspend its 10-year, $210 million naming rights deal with FTX.
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