FTX and Bankman-Fried Are Facing an $11 Billion Class Action Lawsuit

Losses incurred by 'unsophisticated investors', investors have sued the troubled cryptocurrency exchange FTX and its former CEO Sam Bankman-Fried.

FTX and Bankman-Fried Are Facing an $11 Billion Class Action Lawsuit

An $11 billion class action lawsuit has been filed in Florida over the alleged violation of yield-bearing crypto accounts associated with the exchange, Reuters reported on November 16.

FTX has been linked to several celebrities, including Stephen Curry and Shaquille O'Neal of the National Basketball Association (NBA), as well as Tom Brady of the American Football League. There has also been a mention of the Golden State Warriors, an NBA team.

“FTX’s fraudulent scheme was designed to take advantage of unsophisticated investors from across the country, who utilize mobile apps to make their investments. <…> As a result, American consumers collectively sustained over $11 billion dollars in damages,” Oklahoma resident Edwin Garrison stated in the suit.

Extradition of Bankman-Fried is possible

The lawsuit comes amid increasing reports that Bankman-Fried may be extradited from the Bahamas to the United States for interrogation regarding his role in the collapse of FTX.

However, previous reports indicate those venture capitalists (VCs) associated with the exchange are considering filing a lawsuit against Bankman-Fried for alleged fraud.

Although the collapse of FTX has impacted the price of most cryptocurrencies, it is also expected that other associated firms will be forced into bankruptcy.

The Rosen Law Firm, a leading global investor rights law firm, is investigating possible securities claims on behalf of investors who purchased the exchange's native token, FTT, adding to FTX's legal woes. FTT investors may be entitled to compensation, according to the law firm.

Immediately following the FTX liquidity crunch unraveling, the FTT token corrected significantly, at one point plunging by 80%.

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