Defendant Ben Armstrong denied the allegations, stating that he had never been in contact with anyone at FTX.
A group of social media influencers have been called in a new lawsuit alleging they promoted crashing crypto exchange FTX to their millions of followers without proper disclosure. According to the lawsuit, filed Wednesday, the influencers did not disclose the nature of any rewards, payments, or compensation made by promoting the cryptocurrency exchange.
The influencers named in the lawsuit include Erika Kullberg, Ben “BitBoy” Armstrong and Kevin Paffrath, known as “Meet Kevin” on YouTube. Some YouTube creators have reportedly removed “all video clips endorsing FTX and praising Sam Bankman-Fried” from their channels. The lawsuit states that they have since posted apologetic messages about their perceived support of the embattled exchange which is currently under investigation both in the United States and abroad and is speculated to owe as much as $3.1 billion to its top 50 creditors.
The lawsuit quotes Paffrath as saying in a November 22 YouTube video:
“Yeah, it used to be sponsored by FTX. I think that’s a shame. And it’s a scar. And it sucks. If I could go back I would change it, because people got hurt by it. I feel so terribly about it. People got hurt by FTX and it’s a shame.”
The plaintiffs in the lawsuit, which is seeking class action status, are being represented by Adam Moskowitz of the Moskowitz Law Firm. Moskowitz is also involved in another FTX-related lawsuit, this one with celebrities such as Tom Brady and Gisele Bündchen for ‘actively participating’ in the “offering and selling of unregistered securities in the form of yielding accounts.”
“Although FTX paid Defendants handsomely to boost their brand and encourage their fans to invest, Defendants failed to disclose the nature and extent of their endorsements and/or endorsement deals, payments, and compensation,” the lawsuit states. “This action may be one of the only avenues for any of the victims to recover any of their damages.”
The seven plaintiffs named in the lawsuit are from inside and outside the US. They claim they suffered damages after purchasing “an unregistered security of FTX in the form of a YBA [yield-bearing account]” that defendants promoted for the financial benefit of themselves and/or FTX. The lawsuit identified classes of plaintiffs from around the world that constitute “thousands, if not millions, of consumers around the world, to whom YBA was offered and/or sold by FTX.” It requires that the plaintiffs be paid “a sum greater than $1,000,000,000.00” in damages.
The counterclaim is coming. The lawyers in this case couldn’t be more stupid. I have never had contact with anyone at FTX and never even had a reflink.
Show me you’re dumb without telling me you’re dumb.
I’ll roast these low IQ commoners and their lawyers https://t.co/1y2ct85vFq
—Ben Armstrong (@Bitboy_Crypto) March 16, 2023
Meanwhile, defendant Ben Armstrong threatened to counter-sue, denying the allegations and stating that he had never been in contact with anyone at FTX.
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Mercy Mutanya is a technology enthusiast, digital marketer, writer, and IT business management student. She likes to read, write, do crossword puzzles, and binge-watch her favorite TV series.
