The Golden State Warriors are the latest business to find themselves on the receiving end of class action lawsuits alleging them of misleading FTX customers about the safety and reliability of the flailing cryptocurrency platform. The suit, first reported by Reuters, comes on the heels of another class action suit accusing prominent celebrities like Tom Brady and Larry David of engaging in fraudulent activity to help prop up an alleged FTX-led “Ponzi scheme.”
The defendant in the Golden State Warriors’ case, Canadian citizen and Hong Kong resident Elliott Lam, reportedly claimed he filed his case on behalf of thousands, or potentially even millions, of FTX traders who may have been misled by the team’s association night with the platform. The Warriors, which announced a “first-of-it’s kind” partnership with FTX last December, allegedly falsely represented FTX as a safe and reliable platform, according to the lawsuit. Lam, who claims he lost $750,000 during FTX’s recent historic meltdown, seeks damages for FTX users outside the U.S. who held yield bearing accounts. FTX traders, and founder Sam Bankman-Fried, collectively lost billions in recent weeks as the company scrambled during a sudden liquidity crisis. The company filed for bankruptcy last week.
The partnership between the Warriors and FTX saw the basketball franchise drop exclusive NFT collections on the platform. FTX also had their logo virtually placed on the Warrior’s esports team’s court during NBA 2K League games, and on pole pads and press tables for the Santa Cruz Warriors. Meanwhile, on the other side of the country, FTX spent a whopping $135 million to acquire the naming rights for the Miami Heat’s basketball arena.
Lam’s class action lawsuit comes days after the Warriors announced they would pause all FTX-related promotional assets. A spokesperson for the Warriors told Reuters it, “does not discuss pending legal matters.”