It is not the first time that celebrities have come under scrutiny for promoting digital currencies. Last month, the Securities and Exchange Commission announced that it had fined Kim Kardashian $1.26 million for failing to disclose that she had been paid to post a cryptocurrency ad on her Instagram page.
The filing also names FTX founder and former CEO Sam Bankman-Fried as a defendant. The once golden child of the crypto industry oversaw the company until it filed for bankruptcy. FTX has since been reported to be transferring client cash to an investment fund it owns.
The case was brought by the Moskowitz law firm in conjunction with Boies Schiller Flexner LLP. They claimed that US consumers lost $11 billion when FTX crashed.
“FTX were PR and marketing geniuses, and they knew that such a massive Ponzi scheme, bigger than the [Bernie] Madoff’s scheme could only succeed with the help and promotion of the world’s most famous, respected and beloved celebrities and influencers,” class action attorney Adam Moskowitz said in a press release.
The lead plaintiff is Edwin Garrison of Oklahoma. According to Joseph Kaye of the Moskowitz Law Firm, a legal adviser on the case, Garrison was trying to raise some money for his 18-month-old granddaughter and lost her entire investment.
“It’s really sad,” Kaye told BuzzFeed News. “[Garrison] he had a long-term focus and was just trying to do right by her. And now she completely lost the entire investment. So it’s very important to him. There are others whose entire 401(k) went on the platform and it’s gone.”
The lawsuit details the ways that FTX recruited various celebrities to promote the company, including the $20 million deal signed by Brady and Bündchen. They were paid in a combination of shares, now virtually worthless, and digital currency. Bündchen was also named FTX’s philanthropic adviser.
