Eight YouTubers who promoted the fraudulent cryptocurrency firm FTX before its demise are now being sued.
Graham Stephan, Kevin Paffrath, Andrei Jikh, Jaspreet Singh, Brian Jung, Jeremy Lefebvre, Tom Nash, Ben Armstrong, and Erika Kullberg, as well as talent management firm Creators Agency, are named in a $1 billion class action complaint filed on March 15 in the Southern District of Florida, claiming they “promoted, assisted in, and/or participated in” the sale of “unregistered securities” by FTX.
The action also claims that the creators did not follow Federal Trade Commission (FTC) standards for reporting their financial relationships to FTX rigorously enough.
“Though FTX paid Defendants handsomely to push its brand and encourage their followers to invest, Defendants did not disclose the nature and scope of their sponsorships and/or endorsement deals, payments, and compensation, nor conduct adequate (if any) due diligence,” according to the lawsuit.
Edwin Garrison, the suit’s plaintiff, is a private investor who has also sued FTX’s former CEO Sam Bankman-Fried. Other celebrities and athletes who promoted FTX are also named in the complaint, including Kevin O’Leary, Tom Brady, Stephen Curry, Shaquille O’Neal, and Larry David.
According to BuzzFeed, a number of FTX investors from around the world have joined Garrison’s class action suit against Stephan and other YouTubers.
VISIT OUR YOUTUBE CHANNEL“Influencers are paid, just like all other promoters, and thus must be held accountable,” Adam Moskowitz, the attorney representing Garrison and other plaintiffs, told BuzzFeed. “They are paid so much because they play an important role today with social media, in making financial decisions.”
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Kevin Paffrath, who has over 2 million followers on his real estate/finance YouTube channel Meet Kevin, addressed the case in a video posted on March 16. He says he did nothing wrong.
“I lost of money as well on BlockFi, more than I ever made from FTX, frankly, but do I blame the guy who suggested I invest in BlockFi? No. I just put on my big boy pants and accepted the reality of what had happened,” he argued. “I’ve always been a believer that crypto is speculative and short of regulation, and if someone chooses to engage in crypto, that is on them.”
Paffrath also addressed the lawsuit’s allegations that he and/or other creators failed to disclose their financial affiliations with FTX appropriately.
“It’s pretty obvious that when we say regularly, ‘Hey, we’re sponsored by…’ on our videos, or ‘Brought to you by…’, you know, this is an ad,” he told TechCrunch. “We even have to check a little box on our videos that say, ‘Hey, this video includes a paid promotion,’ and every one of our FTX ones has a little disclaimer that says this is paid.”
I have to side with the influencers on this one. They didn’t know that FTX was a scam. An influencer like an NFL quarterback takes the gig to lend his fame to the product for the payout. It’s not his job to make sure the firm is legit. They saw Sam Bankman-Fried hanging out with Democrats, sending money to Ukraine, etc., and the complainants think that they’re supposed to do a rectal exam on the company? I don’t think so.
Does this mean actors who are hired to do television commercials should be held liable if something goes wrong with the product?
I think this is a real Hail Mary for people who lost a fortune by a scam company that the Democratic Party may have had backroom deals with. I don’t see any of the Democrats who were quick to talk about bailouts for banks that went woke and got broke reaching out to help the people scammed by FTX. I guess it’s all about the relationships with Democrats with who got screwed.
