FTX-Linked Celebrities, Influencers Sidestep Most Claims (1)

Allegations against celebrities and YouTube influencers for promoting FTX before the exchange’s collapse mostly fell short, a federal court ruled.

Tom Brady and other sports and entertainment figures and entities partly succeeded on their request for dismissal, but the investors suing them will be able to re-plead their claims. And the investors can proceed with securities claims under Florida and Oklahoma law, Judge K. Michael Moore said Wednesday for the US District Court for the Southern District of Florida.

The claims against the celebrities and influencers largely foundered on the requirement to show fraudulent intent or actual knowledge under securities and consumer protection laws, according to the opinion.

Moore said the defendants didn’t fully address whether securities laws apply to the FTX exchange, FTX accounts, and the company’s FTT token. He therefore declined to dismiss the Florida and Oklahoma securities claims on that basis.

NBA star-turned businessman Shaquille O’Neal has agreed to settle his claims, though the dollar amount isn’t public yet and the court hasn’t approved the deal, and football player William Trevor Lawrence announced a settlement in March 2024. They aren’t among those addressed by the ruling, Moore said. Similarly, eight “Youtubers” were named in the complaint, but five have settled the claims against them, he said.

Investors who bought crypto assets through FTX also sued insiders at the now-bankrupt exchange, third-party advisers, and others in the proposed class actions now consolidated in multidistrict litigation before Moore. They’re seeking damages of about $21 billion beyond the estimated $9.2 billion available in bankruptcy court, according to documents filed when the parties sought to streamline competing claims in the two courts.

Moore’s opinion also addressed consumer protection claims against the celebrities and influencers. California, Florida, and Oklahoma consumer protection laws don’t apply to securities—but since the defendants may raise the securities issue again in the future, it’s premature to dismiss the claims for that reason, Moore said. Nevertheless, the plaintiffs’ failure to show knowledge of fraudulent or deceptive practices bars the claims for now, he said.

The Moskowitz Law Firm and Boies Schiller Flexner LLP are lead counsel for the proposed class. Counsel for the defendants includes Latham & Watkins LLP, McDermott Will & Emery LLP, and Colson Hicks Eidson.

The case is In re FTX Cryptocurrency Exchange Collapse Litig., S.D. Fla., No. 1:23-md-03076, 5/7/25.