A group of former FTX investors has brought charges against YouTube influencers for soliciting the purchase of unregistered securities while promoting the crypto exchange FTX.
The lawsuit that was filed in the Southern District of Florida, Miami Division on March 15th seeks over $1 billion in damages. The plaintiff brought the charges against YouTube content creators who reached millions of people online with their promotions.
Those mentioned as respondents include the talent management company Creators Agency, finance YouTube creator Graham Stephan, BitBoy Crypto creator Ben Armstrong, and seven other individuals.
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According to the suit, the unregistered securities that the defendants promoted were yield-bearing accounts offered by FTX. It claims that the YouTube influencers were paid to endorse FTX, which allegedly was a fraudulent firm, and thus took advantage of thousands, if not millions, of investors globally.
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.
The plaintiffs, represented by Moskowitz Law Firm, claim to have bought unregistered security from the exchange in the form of a yield-bearing account (YBA).
In the lawsuit, the claimants stated that the defendants are responsible for the damages through “misrepresentations and omissions regarding FTX.” They claim that the defendants failed to disclose the nature and scope of their endorsement deals with FTX.
Armstrong denied the allegations, stating that he has never received any money from FTX and that he plans to countersue immediately.
Countersuit coming. The lawyers on this case can’t possibly be more stupid. I’ve never had contact with anyone at FTX and never even had a reflink.
According to the lawsuit, in 2017, the US Securities and Exchange Commission (SEC) warned investors that any person that promotes yield-bearing accounts could face charges for promoting unregistered securities.
The lawsuit is a consolidation of other class-action suits brought against other parties allegedly involved with the fall of FTX.