- The case accuses the influencers of being paid to market unregistered yield-bearing accounts.
- It also claims the YouTubers played a key role in elevating FTX before the collapse.
Investors who suffered losses following the fall of FTX are pressing charges against several internet influencers, accusing them of promoting the business of the failed exchange for personal financial gains and pushing them to invest in unregistered securities.
The lawsuit, seeking US$1B in damages, was brought against ten influencers, mostly from the US and Australia, including YouTube star Ben Armstrong, BitBoy crypto creator, and Las Vegas-based Andrei Jikh, who has 2.2 million subscribers. Talent management company Creators Agency in Tokyo, Japan, is also mentioned among the defendants.
‘‘Though FTX paid Defendants handsomely to push its brand and encourage their followers to invest, Defendants did not disclose the nature and scope of their sponsorship or endorsement deals, payments and compensation, nor conduct adequate due diligence,’’ the filing read. The defendants are also accused of misrepresentations and omissions regarding the FTX platform, playing a key role in elevating it before the collapse.
Plaintiffs Were Drawn From The UK, Canada, And Australia
The case is filed before Florida’s Southern District Miami Division Court and is led by Edwin Garrison, a State of Oklahoma resident, who invested in FTX’s yield-bearing accounts (YBA). The plaintiffs in the case are UK, Canadian, and Australian residents.
Recently, FTX debtors uncovered $3.2B illegally paid to Sam Bankman-Fried and his inner circle, where SBF received $2.2 billion. At the same time, Nishad Singh, Gary Wang, and Caroline Ellison, the three executives who have since pled guilty, pocketed $587m, 246m, and $6m, respectively, through undisclosed payments and loans.
FTX, once ranked among the top cryptocurrency exchanges, imploded in November after a steep drop in the value of its native FTT tokens forced the company to file for Chapter 11 bankruptcy. The case against its former CEO, SBF, will be heard on October 2nd, 2023.
