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Golden State Warriors Sued Over FTX Promotion

Learn about the lawsuit involving the Golden State Warriors and the promotion of FTX, highlighting the implications for non-U.S. investors and the sports industry's relationship with crypto firms.
Published on 2022-11-22

Lawsuit Filed Against Golden State Warriors

A new lawsuit accuses the Golden State Warriors of falsely promoting FTX, a now-collapsed cryptocurrency exchange, to attract investors. This legal action follows a class action filed in a San Francisco federal court, initiated by Elliott Lam, a Canadian resident in Hong Kong. The lawsuit targets former FTX CEO Sam Bankman-Fried and Caroline Ellison, formerly of Alameda Research, seeking damages for non-U.S. FTX users.

Allegations of False Promotion

The lawsuit claims that the Warriors misrepresented FTX as a safe investment platform. The team had announced a groundbreaking cryptocurrency partnership with FTX, positioning it as the official cryptocurrency platform for the organization. Lam alleges the Warriors knew or should have known about the fraudulent nature of FTX but continued their collaboration.

Seeking Damages for Non-U.S. Investors

The lawsuit aims to recover losses for non-U.S. residents with FTX yield-bearing accounts under California consumer protection laws. Lam himself reportedly lost $750,000 due to FTX's collapse. This legal challenge comes alongside another filed in Miami, where American FTX users seek compensation from celebrities, including Stephen Curry and Tom Brady, who endorsed FTX.

Impact on the Sports Industry

FTX's downfall, marked by a rapid $6 billion withdrawal and Binance's withdrawal from a rescue plan, has sent shockwaves through the sports industry. Many teams, previously in partnership with FTX, have rushed to terminate their agreements. The Warriors themselves have halted all related advertising. As the crypto landscape becomes more uncertain, sports teams may reconsider long-term engagements with crypto firms to mitigate risks.

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