This is the second lawsuit that names the Golden State Warriors as a defendent amid the fallout of the collapse of cryptocurrency firm FTX.
SAN FRANCISCO, CALIFORNIA – OCTOBER 9: View of the court before the Golden State Warriors vs. Los Angeles Lakers preseason NBA game at the Chase Center in San Francisco, Calif., on Sunday, Oct. 9, 2022. (Jose Carlos Fajardo/Bay Area News Group)
By MADELINE KENNEY | mkenney@bayareanewsgroup.com | Bay Area News Group
PUBLISHED: November 21, 2022
The Golden State Warriors are facing a second lawsuit amid the fallout of FTX, formerly one of the world’s largest digital currency exchange firms that is now in shambles.
An FTX customer has accused the reigning champions of fraudulently promoting the failed cryptocurrency company that filed for bankruptcy earlier this month in a proposed class-action lawsuit filed Monday in San Francisco federal court.
The 25-page suit, obtained by the Bay Area News Group, also names FTX founder and former CEO Sam Bankman-Fried and Caroline Ellison, who led Bankman-Fried’s trading firm Alameda Research, as defendants.
Elliott Lam, a Canadian citizen and Hong Kong resident who reportedly lost $750,000 in the collapse of FTX, alleged defendants incorrectly depicted FTX as being a “viable and safe way to invest crypto.” If he would’ve known of its unregistered securities, Lam suggests he wouldn’t have done business with FTX, according to the suit.
The suit also alleged the Warriors had knowledge of FTX’s wrongdoings and that the defending champions “knew or should have known” that their partnership with the now-embattled company was “deceitful and fradulent.”
A Warriors spokesperson said the organization doesn’t comment on pending litigation.
The US Attorney’s Office for the Southern District of New York opened an investigation into FTX months before its epic collapse that left investors and customers facing losses that could total in the billions of dollars, according to Bloomberg.
Reuters first reported on the suit.
Golden State was also named alongside several other high-profile backers, including Stephen Curry, Tom Brady and Shaquille O’Neal, in a separate class-action lawsuit filed last week. The suit accused FTX and its former CEO, Sam Bankman-Fried, of using celebrity endorsers to funnel “unsophisticated investors” into a Ponzi scheme and to promote its unregistered securities.
The Warriors previously showed in-arena and digital ads during TV broadcasts as part of their partnership with FTX launched last year. The reigning champs paused all FTX-related promotional assets last week after the company filed for Chapter 11 bankruptcy protection Nov. 11. A Jordan Poole bobblehead giveaway Nov. 14, planned months in advance, was the final FTX-partnered promotion.
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