Jailed FTX founder Sam Bankman-Fried turns on his celebrity endorsers including Tom Brady, Gisele Bundchen and Larry David and agrees to help crypto victims in class-action lawsuit against them

Fallen cryptocurrency wunderkind Sam Bankman-Fried, who is currently serving a 25 year prison sentence following a sweeping fraud case, has agreed to cooperate in a class-action lawsuit against celebrities who promoted his crypto exchange.  

By agreeing to cooperate with the investors, they will now drop their civil liability claims against him.

The celebrities include some big name sports starts including Tom Brady, Shaquille O'Neal, Stephen Curry and Shohei Ohtani.

Brady's ex-wife Gisele Bundchen and actor Larry David are also among the names accused of promoting unregistered securities for FTX and enticing investors into a Ponzi scheme.

The lawsuit claims crypto Bankman-Fried and the celebrities he recruited to endorse the firm are responsible for around $11 billion of losses to American consumers.

Many of the stars were 'ambassadors' for the trading platform, while others appeared in prime-time commercials. 

The plaintiffs hope they might be able to recover some of their losses following the  collapse of FTX in November 2022. 

Bankman-Fried, 32, appealed his federal conviction earlier this month after US District Court Judge Lewis Kaplan set the prison term and ordered him to pay $11 billion in forfeiture.

But in return for dropping him from the lawsuit, Bankman-Fried would hand over all nonprivileged documents detailing his assets and his investment in artificial intelligence start-up Anthropc, an affidavit certifying his net worth as negative, and documents about other defendants in the wide-ranging civil litigation.

Bankman-Fried has also agreed to divulge any information he can about venture capital firms that invested in FTX together with a list of accountants and lawyers that worked with the exchange.

It's not clear what liability any superstar endorsement might be liable for given that Bankman-Fried paid the celebrities to boost the profile of his crypto empire.

Pro football quarterback Trevor Lawrence received $500,000 payment in September 2022, reports Bloomberg.

The celebrities are described in the 41-page as 'parties who either controlled, promoted, assisted in, and actively participated in' FTX's operations, allegedly in breach of Florida law.

The suit adds: 'The Deceptive and failed FTX Platform was based upon false representations and deceptive conduct.

'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.

'As a result, American consumers collectively sustained over $11 billion dollars in damages.'

NFL star Brady and Bundchen, his supermodel ex-wife, are named as FTX ambassadors who 'joined the company's $20-million ad campaign in 2021'  and starred in a commercial 'showing them telling acquaintances to join the FTX platform'.

Basketballer Curry is singled out for appearing in an ad campaign in which he said he didn't need to be an expert in crypto because 'with FTX I have everything I need to buy, sell, and trade crypto safely'.

David appeared in a Super Bowl commercial for FTX which showed him portraying a series of clueless characters as they reject bright ideas through history, including the toilet and the lightbulb.

The ad then showed David reject FTX, before a message appears: 'Don't be like Larry.'

Shaquille O'Neal also appeared in an FTX commercial, as did Steph Curry. Osaka was an 'ambassador' for the company.

The lawsuit states: 'The Deceptive FTX Platform maintained by the FTX Entities was truly a house of cards, a Ponzi scheme where the FTX Entities shuffled customer funds between their opaque affiliated entities, using new investor funds obtained through investments in the YBAs [yield-bearing accounts] and loans to pay interest to the old ones and to attempt to maintain the appearance of liquidity.

'Part of the scheme employed by the FTX Entities involved utilizing some of the biggest names in sports and entertainment – like these Defendants – to raise funds and drive American consumers to invest in the [yield-bearing accounts], which were offered and sold largely from the FTX Entities' domestic base of operations here in Miami, Florida, pouring billions of dollars into the Deceptive FTX Platform to keep the whole scheme afloat.' 

The suit was filed in the US District Court's Southern District of Florida.

Bankman-Fried had soared to the top of the crypto world, becoming a billionaire before age 30 and turning FTX, a small start-up he cofounded in 2019, into the world's second largest exchange platform.

But in November 2022, Bankman-Fried's breakneck rise came crashing down, with a deluge of customer withdrawals and revelations that billions of dollars had been illegally moved from FTX to Bankman-Fried's personal hedge fund, Alameda Research.

He was convicted by a federal jury in New York in November 2023 on seven counts of fraud, embezzlement and criminal conspiracy.

During last month's sentencing hearing, Bankman-Fried expressed regret about the firm's demise, which also affected many colleagues.

'It haunts me every day,' he said. 'I made a series of bad decisions.'

But the judge said Bankman-Fried had not fully accepted responsibility.

Bankman-Fried said 'mistakes were made, but never a word of remorse for the commission of a terrible crime,' said Kaplan, who characterized the violations as 'brazen' and called out SBF for his 'exceptional flexibility' towards the truth.

'Since the collapse of FTX, Mr Bankman-Fried has been singularly focused on returning the estate's assets to customers, who could and should be made whole as of current prices,' said Mark Botnick, a spokesman for Bankman-Fried.