FTX Crypto Collapse

Provided by Clutch Points

Mustang Staff

NFL quarterback Tom Brady, NBA guard Stephen Curry, and MLB pitcher Shohei Ohtani are among a handful of prominent celebrities accused of helping defraud investors in the now bankrupt FTX crypto trading platform exchange. A proposed class-action lawsuit by Edwin Garrison of Oklahoma, represented by attorney Adam Moskowitz, charges Brady and other celebs of selling investors a “Ponzi scheme – larger than the Madoff scheme” (CBS News). The lawsuit seeks $11 billion in damages.

The Bahamas based FTX (Futures Exchange), founded by Sam Bankman-Fried, is being investigated by federal authorities for “allegedly investing depositors funds in ventures without their approval” (AP). The House Financial Services Committee plans to hold a hearing on FTX in December. Bankrate reporter James Royal claims that crypto is “seen as a lottery ticket… it usually takes massive losses for the scales to fall from traders’ eyes.”(CNBC)

FTX is the third crypto company to seek bankruptcy protection this year along with Voyager Digital and Celsius Network.

Reuters reports that at least $1 billion of customer funds are missing from FTX. The company may have more than 1 million creditors.

Bankman is a 30-year-old MIT grade, dubbed the “next Warren Buffett” by Fortune magazine. He founded FTX in 2019.