According to reports, the plaintiffs are seeking $1 billion in damages in a class-action suit against these social media "influencers" who peddled the toxic company and its products to the unsuspecting masses.
One such influencer was former NFL quarterback Tom Brady, who appeared both online and on television hawking FTX as a solid investment tool. Brady, along with Madonna and Gwyneth Paltrow, is the subject of other similar lawsuits aimed at FTX promoters.
For the purposes of this lawsuit, online financial gurus who are believed to have been paid to promote FTX are the subjects of plaintiffs' demands for restitution. All in all, some $8 billion was lost in the collapse of FTX, which left some investors destitute.
"The plaintiffs, from the U.S., Canada, the U.K. and Australia, are seeking more than $1 billion in damages from the YouTubers and an influencer agency, alleging that the '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,'" one report explained.
"The lawsuit claims that the influencers played a 'major role' in the FTX scandal and names seven plaintiffs who invested in FTX Yield Bearing Accounts. It also alleges that without their support and 'hype,' the cryptocurrency platform would not have reached such heights. It adds that influencers took 'undisclosed payments ranging from tens of thousands of dollars to multimillion-dollar bribes.'"
Before its collapse, FTX was secretly funding research to discredit ivermectin as a viable remedy for the Wuhan coronavirus (COVID-19).
Should social media influencers be held responsible for leading people astray into bad investments?
Among the names listed as defendants in the suit are YouTubers Graham Stephan, Andrei Jikh, Jaspreet Singh of "Minority Mindset," Brian Jung, Jeremy Lefebvre, Tom Nash, Ben Armstrong and Kevin Paffrath, who currently has 1.87 million subscribers on his channel "Meet Kevin." Creators Agency and its founder Erika Kullberg are also listed as defendants.
Some of these people have already denied the allegations, including Armstrong who told the news outlet Decrypt that he has never spoken with anyone at FTX or as a marketing agent acting on their behalf. "The allegations against me are 100 percent false and it will be extremely easy to provide evidence of this," he said.
Paffrath posted a video called "Being Sued" in which he called SBF the "most obvious criminal" while sympathizing with those who lost money from the scam. On Twitter, Paffrath blasted the attorney who took on the case, calling them "weenie-baby attorneys."
"People need to put their big boy pants on and realize the Realtor who refers you an electrician does not guarantee the work of that electrician (FTX). Anyone finger-pointing is also a weenie."
In other words, Paffrath does not believe he holds any responsibility in promoting the fraudulent crypto coin and exchange, even though it ended up costing some people their entire lives for following his promotions.
The lawyer for the plaintiffs is Adam Moskowitz, the same guy who filed suits on behalf of FTX losers against Brady, Brady's ex-wife and supermodel Gisele Bündchen and nine other celebrities.
"You have very rich people we all love telling us that they checked this out, and it was okay. Why shouldn't they be held responsible?" Moskowitz stated in an interview. "It seemed like a lot of investors were getting hurt and no one was really looking out for them."
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