Social Media Influencers Who Promoted Crypto Company FTX Targeted in New Lawsuit
A new class-action lawsuit has been filed in the U.S. District Court Southern District of Florida Miami Division against social media influencers for promoting cryptocurrency exchange FTX.
FTX is a multibillion-dollar Texas-based crypto exchange that filed for Chapter 11 bankruptcy in November 2022. The following month, FTX founder and former CEO Sam Bankman-Fried was arrested and charged with defrauding clients of their money and using it to merge with neighboring firm, Alameda Research, for his own personal gain.
The lawsuit, led by FTX retail investor Edwin Garrison, has named eight YouTubers and influencers as respondents. These include Kevin Paffrath, Graham Stephan, Andrei Jikh, Jaspreet Singh, Brian Jung, Jeremy Lefebvre, Tom Nash, Ben Armstrong, along with Erika Kullberg – founder of talent management firm Creators Agency.
The lawsuit alleged that these social media influencers promoted FTX and praised its founder without fully disclosing the details of their sponsorship or endorsement agreement.
The filing states:
“The Defendants (1) all admittedly endorsed and promoted the sale of the FTX YBAs and (2) none of them disclosed, in any of their YouTube and other social media posts, that they were paid hundreds of thousands and/or millions of dollars by FTX and profited from the sale of FTX YBAs, in clear violation of SEC, FTC and various federal and state regulations.”
According to the lawsuit some of the influencers removed all videos on their YouTube channel endorsing FTX and asked for forgiveness.
The filing continues:
“For their part, the Defendants, Kevin Paffrath, Graham Stephan, and Tom Nash, who prior to FTX’s collapse promoted FTX as a safe investment to their legions of followers, have now scrubbed their YouTube channels of all video clips endorsing FTX and praising Sam Bankman-Fried. In their place, the YouTube Influencers have substituted mea culpas and apology videos acknowledging their significant role in promoting FTX and causing billions of dollars of investor losses.”
The lawsuit seeks over $1 billion in damages.
Other personalities who are caught in the FTX collapse are Stephen Curry, Larry David, and Shaquille O’Neal – who has allegedly been dodging court documents to appear before the FTX lawsuit.
A copy of the original filing can be found here.
