• FTX, a troubled firm, is set to reboot as early as April 2021.
• A handful of YouTubers promoting the firm were served class-action lawsuits.
• Advisors of the company pocketed millions in Q1.
FTX Plans Reboot
FTX plans to reboot as early as April 2021 while influencers promoting the troubled firm continued to get served while advisors pocket millions.
Class Action Lawsuit
A class action lawsuit was filed against 10 defendants named in it, claiming that influencers played a “major role” in the FTX scandal and that the crypto exchange wouldn’t have risen to such heights without their backing and “hype.” Despite promoting and being “handsomely” paid for it, these influencers failed to disclose their compensation. Among them are crypto YouTuber Tom Nash from Sydney, Kevin Paffrath, Graham Stephan, Andrei Jikh and Jaspreet Singh. YouTuber and Crypto Twitter personality Ben Armstrong (aka BitBoy Crypto) was also named in the lawsuit but he missed his court appearance ordered by a federal judge.
The victims of FTX’s collapse claim that they lost their fortunes due to false claims made by these influencers about how secure FTX was with their money. They allege that these influencers promoted FTX for personal financial gain rather than informing investors of its associated risks or making sure investments were safe with the firm.
Advisors Pocket Millions
Meanwhile, advisors connected with FTX have continued to benefit from investments made into the platform raking up $103 million in Q1 alone while victims suffered huge losses due to mismanagement of funds at FTX and false promises made by its promoters/influencers.
It remains unclear what will be outcome of this case but it is possible that if found guilty those involved may face fines or other legal repercussions for their actions or omissions that contributed towards people losing money investing with the platform.