Lawsuit back by FTX’s ex-compliance head against celebrity endorsers.

By Lillie Lamb On May 12, 2023

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A class action lawsuit against celebrities accused of promoting the now bankrupt FTX exchange has had the collaboration of former FTX and FTX USA compliance chief Daniel Friedberg.

In a proposed amended complaint filed May 11, class action attorneys disclosed that Friedberg provided evidence that FTX’s promotional activity originated from Florida. This could challenge a critical defense put forward by some of the defendants who argued that the Miami court had no jurisdiction and that the allegations had nothing to do with Florida.

The lawsuit was first filed in mid-November, shortly after the stock market crash. Other alleged famous promoters include Gisele Bundchen, Kevin O’Leary, Steve Curry and his Golden State Warriors team.

We are proud to announce that Tom Brady will serve as an ambassador for FTX, and Giselle as an advisor for FTX’s environmental and social initiatives.
“We have an opportunity to create something really special here.” says the Super Bowl champ and entrepreneur @tom brady https://t.co/yDLC1Q1KFG
– FTX (FTX_Official) June 29, 2021

Friedberg was also named as a defendant in an amended December 16 complaint.

A few weeks after the collapse of FTX, the former head of compliance reportedly assisted investigators from the New York District Attorney’s Office, the Department of Justice, the FBI, and the Securities and Exchange Commission in their investigations into the exchange.

Friedberg reported “in early 2021” that Dapier was based out of FTX’s Miami office. Class action attorneys used this to counter the defendants’ efforts to have the lawsuit dismissed.

In court, Friedberg, chief regulatory officer at FTX and chief compliance officer at FTX US, testified that Avinash “Avi” Dapier, vice president of business development at FTX US, was located in Miami, overseeing FTX’s brand ambassadors, including defendants.

Friedberg’s new evidence may help the plaintiff’s case and undermine the defense’s arguments that they lack jurisdiction.

The court’s decision, however, is still up in the air. The case shows how authorities and investors are paying more attention to bitcoin exchanges.

The growing number of cryptocurrency investors has prompted calls for more openness and responsibility on the part of industry companies, especially cryptocurrency exchanges.