Taylor Swift the only celebrity to ask if FTX was pushing ‘unregistered securities’: attorney

Image shows Taylor Swift in front of an FTX sign. — Taylor Swift is the lone celebrity to ask whether FTX was peddling unregistered securities.

By John Hilton

Singer and megastar Taylor Swift is the lone celebrity pursued by disgraced cryptocurrency developer Sam Bankman-Fried who asked the right questions about FTX, an attorney suing SBF said Tuesday.

High-profile Florida attorney Adam Moskowitz filed a November class-action lawsuit against SBF and the roll call of celebrities that endorsed FTX, including Tom Brady, Gisele Bundchen, Shaquille O’Neal and Larry David.

Moskowitz joined hosts Frank Chaparro and Stephanie Murray on “The Scoop” podcast to talk about the $5 billion class action lawsuit.

None of the 16 celebrities endorsers named in the lawsuit, filed in the Southern District of Florida, bothered with due diligence when presented with their FTX sponsorship offer, Moskowitz said.

"The one person I found that did that was Taylor Swift," he added. "[She] actually asked that, ‘Can you tell me that these are not unregistered securities?’”

Most of the celebrities filed motions to dismiss the lawsuit last week.

Taking on crypto

Through his The Moskowitz Law Firm in Miami, Moskowitz is behind several class-action lawsuits against major crypto companies, including the now-bankrupt FTX and Voyager Digital. He filed a new class-action lawsuit March 31 against influencers who have promoted Binance, the world’s largest crypto exchange.

"It’s been sort of a battle because Voyager goes bankrupt and they’re going to get bought out by FTX. FTX goes bankrupt and they’re going to be saved by Binance," Moskowitz said in the podcast. "And now we have class actions against Voyager, FTX and Binance and we’ve got billions of dollars at loss for our victims all around the world. And you have their aiders and abettors who are their celebrity influencers who we have cases against.”

Seven-time Super Bowl winning QB Tom Brady and former wife-model Gisele Bundchen appeared in a series of Super Bowl ads for FTX. Brady owned 1.1 million common shares of FTX, while Bundchen owned 686,000 shares, according to bankruptcy court documents filed in January.

At its peak in July 2021, the privately held FTX was valued at around $32 billion and touted over 1 million users. It all unraveled quickly in November 2022 after a CoinDesk article stated that FTX's partner firm Alameda Research held a significant portion of its assets in FTX's native token (FTT). That sparked a rush to pull money from FTX and the company declared bankruptcy on Nov. 11.

Edwin Garrison, a resident of Oklahoma and an investor in FTX, is the plaintiff in the lawsuit Moskowitz and his team, which includes famed attorney David Boies, filed Nov. 15.

They claim that FTX was “a massive Ponzi scheme,” and that SBF and his partners were “geniuses at public relations and marketing.”

SBF was arrested in December in the Bahamas at the request of U.S. authorities. The SEC, which filed a complaint on Dec. 13 in the New York's Southern District court, accuses the former crypto king of "orchestrating a scheme to defraud equity investors in FTX."

FTX plaintiffs could number millions

FTX offered yield bearing accounts [YBAs] that guaranteed an 8% annual gain for total collective deposits under $10,000 and a 5% APY for total collective deposits between $10,000 and $100,000.

“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 and loans to pay interest to the old ones and to attempt to maintain the appearance of liquidity,” the lawsuit reads.

The total number of plaintiffs worldwide could number in the millions, the lawsuit said. Resolution could come fairly quickly, Moskowitz told podcast hosts. A May hearing is set to determine whether all of the cases should be consolidated.

“It’s a crazy case that you had aiding and abettors, people that actually promoted unregistered securities and that’s all you have to do under [Florida] law," Moskowitz added.

InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.