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November 29th, 2022
Are Tom Brady and Larry David Liable for the FTX Disaster?
Blockchain Technology Co-Chair Hannah Taylor is quoted in the article, “Are Tom Brady and Larry David Liable for the FTX Disaster?” published by Decrypt. The article discusses the class-action lawsuit against FTX and how likely the allegations will stick to the celebrity endorsers who are listed as co-defendants. Hannah is quoted saying, “There’s not been a lot of precedent for holding celebrities accountable in this sort of case. It’s usually done to help draw PR attention to a case. What’s really going to be hard for them is to prove the idea of conspiracy or fraud—the idea that [these celebrities] were somehow part of some mastermind scheme to defraud consumers. I think that’s unlikely.”
The class-action lawsuit also invoked Florida state securities laws, claiming that FTX violated such statutes by peddling unregistered yield-bearing accounts (YBAs) like staking pools, which offered users guaranteed returns on deposits. “Once a digital asset that someone is promoting is found to be a security, additional rules apply about what they have to disclose and how they have to engage with consumers. If the Florida judge in last week’s lawsuit rules that FTX’s YBAs were in fact securities, past celebrity endorsers of FTX could be exposed to increased liability,” said Hannah.
Hannah says, “There are still factors that could increase a celebrity’s exposure to liability, though. The further their statements on FTX strayed from a general endorsement to specific claims of safety, trustworthiness, or guaranteed returns, the greater the risk of liability. What Steph Curry said, making safety claims about the platform, goes beyond what, for example, Naomi Osaka said, going ‘Oh, cool! FTX!’”
Hannah thinks the class-action lawsuit could be the least of these celebrities’ worries. She says, “Even if these plaintiffs might not be able to prove from a class action standpoint that these celebrities were willfully involved in some conspiracy to defraud consumers, you might have technical noncompliance with other laws.”
Read the full article here.
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