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Class-action lawsuit filed against FTX and celebrities who promoted the crypto platform

The class-action lawsuit alleges the FTX platform was "based upon false representations and deceptive conduct."

MIAMI — A class-action lawsuit filed Tuesday in the U.S. District Court for the Southern District of Florida alleges the crypto platform, FTX, misled customers – leading to billions of dollars lost. 

The lawsuit, filed by investor Edwin Garrison, also names Tom Brady, Shaquille O'Neal, the Golden State Warriors, and others, alleging celebrities promoted FTX in an effort to get more people to invest in yield-bearing accounts or YBAs.

"Although many incriminating FTX emails and texts have already been destroyed, we located them and they evidence how FTX's fraudulent scheme was designed to take advantage of unsophisticated investors from across the country, who utilize mobile apps to make their investments," the lawsuit reads. "As a result, American consumers collectively sustained over $11 billion dollars in damages."

The suit goes on to add that the plaintiff, Garrison, trusted the company "after being exposed to some or all of Defendants' misrepresentations and omissions regarding the Deceptive FTX Platform."

As of Friday, FTX confirmed there was "unauthorized access" to its accounts, just hours after the company filed for Chapter 11 bankruptcy protection. 

Exactly how much money is involved is unclear, but analytics firm Elliptic estimated Saturday that $477 million was missing from the exchange. Another $186 million was moved out of FTX’s accounts, but that may have been FTX moving assets to storage, said Elliptic’s co-founder and chief scientist Tom Robinson.

A debate formed on social media about whether the exchange was hacked or a company insider had stolen funds – a possibility that cryptocurrency analysts couldn’t rule out.

Until recently, FTX was one of the world’s largest cryptocurrency exchanges. It was already short billions of dollars when it sought bankruptcy protection Friday and its former CEO and founder, Sam Bankman-Fried, resigned.

The company had valued its assets between $10 billion to $50 billion, and listed more than 130 affiliated companies around the world, according to its bankruptcy filing.

The unraveling of the once-giant exchange is sending shockwaves through the industry, with companies that backed FTX writing down investments and the prices of bitcoin and other digital currencies falling. Politicians and regulators are calling for stricter oversight of the unwieldy industry. Experts say the saga is still unfolding.

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