NBA team Golden State Warriors faces a lawsuit for promoting FTX

An FTX user is filing a lawsuit against the NBA team Golden State Warriors. The user is Elliot Lam who is accusing the team of fraudulently backing the FTX exchange as they lost $750,000 to the crypto platform’s collapse.

nba-golden-state-warriors-lawsuit
Warriors

The plaintiff Elliot Lam filed a class action lawsuit in San Francisco against Sam Bankman-Fried (former CEO), Caroline Ellison, CEO of Sam Bankman Fried’s trading firm Alameda Research and the Golden State Warriors, looking for $5 million in damages, as per the reports from the media which had access to the lawsuit.

According to the plaintiff Elliot, thousands, if not millions, of consumers internationally lost their savings because of the large-scale fraud perpetrated by FTX, which continues to wreak havoc on the crypto ecosystem.

Elliot also stated that the NBA team deliberately promoted the cryptocurrency platform as a reliable and safe way to invest in crypto, after marking a $10 million deal with FTX last year in December.

At the time of the deal, Brett Harrison, president of FTX USA, mentioned that the partnership with the Warriors offered a secure venue for fans overseas to access the franchise’s exclusive collectibles, improving FTX’s ability to make a positive change, not only domestically but internationally, with one of the most prestigious professional sports franchises in the world.

Also read: Vitalik Buterin provides suggestions for the crypto ecosystem amid FTX Collapse

However, the Golden State Warriors paused all promotions related to FTX after reports of the platform’s bankruptcy circulated, as many users who put their trust in the team’s prestige lost millions of dollars in the exchange.

Being the current NBA champion it’s obvious that the fan following is massive and the lawsuits have not stopped coming. In addition, the team is facing a class action lawsuit in Miami from FTX US clients, who are suing the team and several major celebs such as quarterback Tom Brady, Tennis player Naomi Osaka, and Shaq among others. In fact, Warriors star player Stephen Curry is another celebrity who is under public scrutiny. He is also being sued in Miami for promoting the crypto platform.

Kevin O’Leary, who is well-known as Mr. Wonderful on the TV show Shark Tank, shared his views with the media and expressed that what happened is horrible and that those responsible should be held accountable. The Shark concluded his message with a plea to regulators to do their job.

The new CEO of the fallen exchange FTX, John J. Ray III, recently revealed that the exchange suffered a complete failure of corporate controls with some mindblowing disclosure like the lack of files to archive conversations and meetings, the approval of budgets and expenses with emojis, the lack of H.R control, and the lack of regular reconciliation of positions on the blockchain.

With the manner in which people have lost their funds and the lack of regulations surrounding crypto, it will be difficult for people to recover their funds especially when there are accusations on prominent political figures and the government for using the scheme as a money laundering scheme.


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