Major Celebrities Cleared in FTX Lawsuit, But Some Claims Remain Active
In a significant legal ruling this week, a judge dismissed most claims against high-profile celebrities associated with the failed cryptocurrency exchange FTX, which collapsed in late 2022. U.S. District Judge K. Michael Moore stated that investors could not prove that endorsers such as Tom Brady, Stephen Curry, and Naomi Osaka were aware of fraud within the company.
The lawsuit initially sought to hold these celebrity figures accountable for their promotion of FTX, which had garnered substantial attention and partnerships with various sports teams before its bankruptcy. The judge noted that while the actions of these celebrities might have indicated negligence or recklessness, there was no evidence that they had intended to deceive investors or were aware of FTX’s fraudulent activities.
Despite the favorable ruling for the celebs, the judge allowed part of the lawsuit to continue regarding allegations that they promoted unregistered securities. This leaves room for potential legal action if the plaintiffs choose to amend their complaints against the celebrities involved.
FTX, founded by Sam Bankman-Fried, was once a leading player in the cryptocurrency market, enabling users to trade various digital assets. However, it suffered a sudden downfall when it was revealed that Bankman-Fried had mismanaged customer funds, leading to a shocking bankruptcy and the disappearance of billions in investor capital. Bankman-Fried is currently serving a 25-year prison sentence for fraud-related crimes, with ongoing appeals from his legal team claiming bias during the trial.
As the case unfolds, observers are keenly watching whether the remaining claims against the celebrity endorsers will lead to further legal consequences.
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