The Golden State Warriors named FTX as an “official cryptocurrency platform” last December.
One former FTX customer is now suing the organization in California after FTX’s collapse.
Elliott Lam accuses the Warriors of falsely promoting FTX as a “viable and safe way to invest in crypto.”
An FTX customer who says he lost $750,000 after the crypto exchange went bankrupt has filed a lawsuit against the NBA’s Golden State Warriors accusing the team of fraudulently promoting the firm.
Elliott Lam, a Canadian who lives in Hong Kong, filed the proposed class-action lawsuit in San Francisco against Sam Bankman-Fried, Caroline Ellison, and the reigning NBA champions.
The lawsuit, which Insider has seen, seeks $5 million in damages for non-US customers, adding that “thousands, if not millions, of consumers internationally” have been impacted by the collapse of FTX, which the suit claims perpetrated “fraud and deceit at a scale rarely seen.
Reuters first reported the lawsuit Monday.
The Warriors are also defending a lawsuit in Miami, filed by American FTX customers.
FTX filed for bankruptcy on November 11, having previously been worth $32 billion. Its court filings show that the company has up to one million creditors, and a lack of oversight to the extent that it didn’t have an accounting department.
Lam’s lawsuit says the defendants falsely represented FTX as a “viable and safe way to invest in crypto.”
It also alleges that the company sold unregistered securities through yield-bearing accounts, which gave interest on cryptocurrencies.
The lawsuit alleges that FTX used “A-list celebrities and mass branding campaigns” in order to “drive unwitting investors and consumers into a Ponzi-like scheme.”
The Warriors were instrumental in this, it adds, because as a successful NBA team it has “unprecedented reach internationally” and exposed FTX’s marketing to “millions of consumers.”
The suit accuses the Warriors of violations of California’s false advertising and unfair competition laws.
When contacted by Insider, the Warriors declined to comment, saying: “Per organizational policy, we do not comment on ongoing legal matters.”
The Warriors named FTX its “official cryptocurrency platform and NFT marketplace” last December, in a first-of-its-kind partnership which also saw FTX’s logo printed on the Warriors’ home court. CNBC reported that this deal was worth $10 million, before the Warriors put it on pause last week.
In the announcement, FTX’s US president, Brett Harrison, said that its NFT platform “will provide a leading, safe and secure venue for the Warriors international fan base to access exclusive collectibles from the franchise.”
The team’s star point guard Stephen Curry – as well as other celebrities – are also under fire for endorsing the company, and join the Warriors as defendants in the Miami lawsuit.
Read the original article on Business Insider
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