NEW YORK – Jaguars quarterback Trevor Lawrence is among a host of Hollywood and sports celebrities named as defendants in a class-action lawsuit against cryptocurrency exchange FTX, according to a report from USA Today’s JagsWire.
Larry David and Tom Brady were also named in the lawsuit, which argues that their celebrity status made them culpable for promoting the firm’s failed business model.
According to USA Today, the celebrities and athletes are accused of not disclosing “the nature, scope, and amount of compensation” they received to promote FTX and not performing “any due diligence” before marketing FTX products to the public.
FTX has been in the public eye for more than a week, after the third-largest cryptocurrency exchange ended up with billions of dollars worth of losses and had to seek bankruptcy protection on Friday. The Bahamas-based company and its founder, Sam Bankman-Fried, are under investigation by state and federal authorities for allegedly investing depositors funds in ventures without their approval.
Lawmakers also announced plans to investigate the failure of FTX, with the House Financial Services Committee saying it plans to hold a hearing on FTX in December.
Before its failure, FTX was known to use high-profile Hollywood and sports celebrities to promote its products. It had the naming rights to a Formula One racing team as well as a sports arena in Miami. Its commercials featured “Seinfeld” creator David, as well as Brady, the star quarterback of the Tampa Bay Buccaneers, basketball players Shaquille O'Neal and Stephen Curry, and tennis star Naomi Osaka.
The lawsuit filed late Tuesday alleges that these sports and TV celebrities brought instant credibility to FTX, and should be held just as culpable as Bankman-Fried.
USA Today reported that Lawrence, 23, signed a multiyear sponsorship with FTX (known as Blockfolio at the time) days ahead of the 2021 NFL Draft when he was picked first overall by the Jaguars.
We're excited to announce our partnership with football star, @Trevorlawrencee! The world of sports and crypto will never be the same. pic.twitter.com/8KC3ZHHagu— FTX App (@ftx_app) April 26, 2021
According to USA Today, Lawrence pushed back on reports that he took his entire $24 million signing bonus in cryptocurrency and lost about $15 million in the 2022 crash of the industry.
“Part of the scheme employed by the FTX Entities involved utilizing some of the biggest names in sports and entertainment—like these Defendants—to raise funds and drive American consumers to invest ... pouring billions of dollars into the deceptive FTX platform to keep the whole scheme afloat,” the lawsuit said.
Class-action attorney Adam Moskowitz pointed to previous cases where the U.S. government fined celebrities Kim Kardashian and Floyd Mayweather for promoting crypto.
“The crypto industry needed celebrity endorsers to get any credibility,” Moskowitz said.
Jacksonville attorney John Phillips told News4JAX the suit could set a new precedent and invite even more cryptocurrency lawsuits.
“It’s the next thing. You can’t get paid as a celebrity to endorse a bad product and say, well, oops, I didn’t know, because your actions, your words have consequences,” Phillips said.
The plaintiff in the case is Pierce Robertson, who is also involved in a case involving Voyager Digital, another failed cryptocurrency company that was endorsed by Dallas Mavericks owner Mark Cuban. Voyager Digital failed for bankruptcy protection this summer, but FTX had pledged to buy Voyager’s assets for $1.4 billion, which would have led to financial relief for Voyager’s depositors. FTX’s failure now puts its aid to Voyager in question.
The lawsuit was filed in the Southern District of Florida. Moskowitz is the attorney representing the victims in the collapse of a Florida residential tower in Surfside, Florida.
Well-known attorney David Boies, who represented the U.S. government against Microsoft in the 90s and Al Gore in the 2000 election, is also named as an attorney on the case.
The Miami Heat were starting a four-game road trip in Toronto on Wednesday. Forward Udonis Haslem, also named in the lawsuit, is away from the team for personal reasons.
Fatima Hussein in Washington and Tim Reynolds in Miami contributed.