YouTubers Sued for $1 Billion for Promoting FTX
On March 15th, a class-action lawsuit was filed against a group of YouTubers and content creators for their role in promoting FTX and their sale of unregistered securities, in the form of yield-bearing accounts (YBA).
The lawsuit claims that “FTX could not have arisen to such great heights without the massive impact of these Influencers, who hyped the Deceptive FTX Platform for undisclosed payments ranging from tens of thousands of dollars to multimillion dollar bribes”.
The Defendants of the lawsuit are Kevin Paffrath, Graham Stephan, Andrei Jikh, Brian Jung, Jeremy Lefebvre, Tom Nash, Ben Armstrong, Erika Kullberg, and Creators Agency, which is a a talent management firm and digital ad network.
The lawsuit was filed in Florida’s Southern District Miami Division Court by Oklahoma resident, Edwin Garrison, and the lawsuit includes plaintiffs from Florida and the United Kingdom.
Here is a link to the actual lawsuit document: https://storage.courtlistener.com/recap/gov.uscourts.flsd.638960/gov.uscourts.flsd.638960.1.0.pdf
“This action may be one of the only avenues for any of the victims to recover any of their damages. Plaintiffs bring this action against YouTube and social media financial influencers and promoters who shared financial advice and actively promoted FTX and its yield-bearing accounts (“YBAs”) to their millions of followers. 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 sponsorships and/or endorsement deals, payments and compensation, nor conduct adequate (if any) due diligence.”
- Statement from the Lawsuit
The lawsuit also goes on to claim that the defendants implicitly acknowledged their guilt when they deleted all FTX content from their websites and issued apologies for promoting the collapsed company.
I am very interested to see how this lawsuit is handled, as this could open up the flood gates for people to start suing celebrities and influencers for promoting something that has failed to live up to promises or expectations.
Also, I know that $1 Billion is a ridiculous asking price, but I do expect that these plaintiffs might actually see some money as a result of this lawsuit.
What are your thoughts on this news?
Do you think this lawsuit has a chance at winning?
Do you believe it is smart to go after the celebrities and influencers who promote products and services?
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