It is not the first time that celebrities have found themselves under scrutiny for promoting digital currencies. Last month, the Securities and Exchange Commission announced that it had fined Kim Kardashian $1.26 million for failing to disclose that she had been paid for posting an ad for crypto on her Instagram page.
The filing also names FTX’s founder and former CEO, Sam Bankman-Fried, as a defendant. The onetime golden child of the crypto sector oversaw the company until it declared bankruptcy. It has since been reported that FTX was moving customers’ cash into an investment fund that it owned.
The case was filed by the Moskowitz Law Firm in conjunction with Boies Schiller Flexner LLP. They claimed that American consumers lost $11 billion when FTX went down.
“FTX were geniuses at public relations and marketing, and knew that such a massive Ponzi scheme, larger than the [Bernie] Madoff scheme, could only be successful with the help and promotion of the most famous, respected, and beloved celebrities and influencers in the world,” class action attorney Adam Moskowitz said in a press release.
The lead plaintiff is Edwin Garrison of Oklahoma. According to Joseph Kaye of the Moskowitz Law Firm, a cocounsel on the case, Garrison was trying to generate some money for his 18-month-old granddaughter and lost his entire investment.
“It’s really sad,” Kaye told BuzzFeed News. “[Garrison] had a long-term approach on it and was just trying to do right by her. And now he completely lost the entire investment. So it’s very significant to him. There are others whose entire 401(k) went into the platform and is now gone.”
The lawsuit details the ways various celebrities were enlisted by FTX to promote the company, including the $20 million deal signed by Brady and Bündchen. They were paid in a combination of stock — now virtually worthless — and digital currency. Bündchen was also made a philanthropic adviser to FTX.