Case 1:22-cv-23753-KMM Document 205 Entered on FLSD Docket 05/15/2023 Page 1 of 294
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF FLORIDA
`MIAMI DIVISION
`
`CASE NO. 1:22-cv-23753-KMM
`
`EDWIN GARRISON, et al., on behalf of
`themselves and all others similarly situated,
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`Plaintiffs,
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`v.
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`SAM BANKMAN-FRIED, et al.,
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`Defendants.
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`AMENDED CLASS ACTION
`COMPLAINT
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`JURY DEMAND
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`AMENDED CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL
`
`Plaintiffs, on behalf of themselves and all others similarly situated, sue Defendants, who
`
`
`
`
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`all promoted, assisted in, and/or actively participated in FTX Trading LTD d/b/a FTX’s (“FTX
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`Trading”), West Realm Shires Services Inc. d/b/a FTX US’s (“FTX US”), and Alameda Research,
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`LLC’s (collectively, the “FTX Group” or “FTX”), offer and sale of unregistered securities,
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`including but not limited to the Deceptive FTX Platform, identical FTX yield-bearing accounts
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`(“YBAs”) and FTX’s native cryptocurrency token, “FTT,” and also aided, abetted and/or actively
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`participated in the FTX Group’s massive, multibillion dollar global fraud.
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`INTRODUCTION
`
`1.
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`Everyone now agrees the FTX Disaster is the largest financial fraud in US history.
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`Defendant Sam Bankman-Fried, FTX’s founder and former CEO, is on house arrest awaiting his
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`criminal trial in October of this year. FTX’s new CEO—who helped wind down Enron—
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`concluded the fraud here was worse than Enron. Billions of dollars have been stolen from investors
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`across the globe. These Defendants conspired and aided and abetted FTX’s multi-billion-dollar
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`fraud and conversion for their own financial and professional gain.
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`

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`Case 1:22-cv-23753-KMM Document 205 Entered on FLSD Docket 05/15/2023 Page 2 of 294
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`Edwin Garrison, et al. v. Samuel Bankman-Fried, et al.
`Amended Class Action Complaint and Demand for Jury Trial
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`
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`2.
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`What’s more, FTX would not have been successful in perpetrating this fraudulent
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`scheme on Plaintiffs and Class Members around the globe without key events that took place in
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`and emanated from right here in Miami, Florida, which not only eventually became FTX’s official
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`headquarters but was their de facto domestic headquarters for years before FTX’s eventual
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`collapse. According to the Declaration of Dan Friedberg, attached as Exhibit A, FTX maintained
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`an office in Miami, Florida, since early 2021, long before FTX eventually moved its Domestic
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`2
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`

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`Edwin Garrison, et al. v. Samuel Bankman-Fried, et al.
`Amended Class Action Complaint and Demand for Jury Trial
`headquarters to Brickell in late 2022. Id., ¶ 20. Since early 2021, FTX’s Miami office was run by
`
`Mr. Avinash Dabir, who was based in Miami and originally worked for Blockfolio as Director of
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`Product and Partnership before FTX later acquired Blockfolio in late 2020.1 Id. Dabir eventually
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`became FTX’s Vice President of Business Development. Id. Friedberg met with Mr. Dabir often
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`and is very familiar with Mr. Dabir and his activities. Id.
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`3.
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`Mr. Dabir operated from FTX’s Miami office, and he was focused on formulating
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`and executing FTX’s important celebrity partnerships. Id., ¶ 21. Mr. Dabir had a lot of prior
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`experience working with some of the major sports industries, including the NBA. Id.
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`4.
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`According to Friedberg, Mr. Dabir was very good at his job, and it was his idea to
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`expend significant resources on FTX’s sports and celebrity-based partnerships. Id., ¶ 22. Mr. Dabir
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`specifically started by suggesting FTX form a Partnership with the Miami Heat and the naming
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`rights to the Miami Arena. Id. FTX announced the Partnership in March 2021, and included FTX
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`purchasing the naming rights of the Miami Heat stadium for 19 years in a deal worth approximately
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`$135 million. Id.
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`5.
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`The naming of the “FTX Arena” served as an important centerpiece for FTX’s
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`efforts to reach other FTX partnerships with celebrities and other well-known partners. Id., ¶ 23.
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`Mr. Dabir was the senior FTX executive responsible for creating, consummating, and
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`implementing deals between FTX and other Partners, such as Major League Baseball, the MLB
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`Umpire’s Association, TSM, the Mercedes Formula 1 team, Tom Brady, Stephen Curry, the
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`Golden State Warriors, Naomi Osaka, Larry David, and Shohei Ohtani. Id.
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`
`1 See https://www.coindesk.com/markets/2020/08/25/ftx-exchanges-150m-deal-for-mobile-first-
`blockfolio-is-a-retail-trading-play/
`(accessed
`May
`10,
`2023);
`see
`also
`https://www.crunchbase.com/organization/blockfolio/people (accessed May 10, 2023).
`
`3
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`

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`Edwin Garrison, et al. v. Samuel Bankman-Fried, et al.
`Amended Class Action Complaint and Demand for Jury Trial
`Having Larry David agree to conduct a commercial for FTX during the 2022 Super
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`6.
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`Bowl was a very big event for FTX because, according to Friedberg, it was the first time that he
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`had ever agreed to serve as a spokesperson for any product. Id., ¶ 24. Mr. Dabir deserves much of
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`the credit for creating that idea and concept and collaborating with Mr. David and his team,
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`resulting in the award-winning Super Bowl FTX commercial that aired with the Super Bowl in
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`2022. Id.
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`7.
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`Released on March 31, 2022, Mr. Dabir appeared on the popular cryptocurrency
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`podcast The Joe Pomp Show, where he was interviewed by Mr. Pompliano for over half an hour
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`on specifically the efforts he undertook and oversaw from his FTX base of operations in Miami,
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`Florida, to create, consummate, and implement, among other things, the FTX arena deal and the
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`Larry David Superbowl commercial. A transcript of the podcast is attached as Exhibit B.
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`8.
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`Mr. Dabir begins by introducing himself as “Vice President of Business
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`Development at FTX, so I handle a lot of our sports partnerships as well as doing some of the
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`interesting things in real estate as well.” Ex. B at 2. He then explains that “the end goal” is really
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`how does FTX “acquire more users.” Id.
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`9.
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`After first acknowledging and agreeing with Mr. Pompliano that FTX was at that
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`point the “leaders” in the sports partnership category and that “it started with Miami Heat Arena,”
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`Mr. Dabir explained that he led the effort to obtain the FTX Arena deal because he “had previously
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`worked at the NBA” and that he identified Miami because it had “a great market,” a “multicultural,
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`great team,” and the “Crypto Buzz was like growing here in Miami.” Id., at 2–3. Dabir explained
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`that a contributing factor to the deal was “the fact that this was during COVID where, you know,
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`a decent amount of live event businesses were-were short on revenue,” which “opened up the door
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`where we could have that conversation” with Miami-Dade County and the Miami Heat. Id., at 4.
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`4
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`

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`Case 1:22-cv-23753-KMM Document 205 Entered on FLSD Docket 05/15/2023 Page 5 of 294
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`Edwin Garrison, et al. v. Samuel Bankman-Fried, et al.
`Amended Class Action Complaint and Demand for Jury Trial
`10. Mr. Dabir also explained that it was crucial “to get approval from a local
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`government, plus the Heat and the NBA who had their own diligence teams looking into” the FTX
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`Arena deal because it “really sort of validated not only just FTX but the cryptocurrency industry
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`in general.” Id., at 4.
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`11.
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`In order to close the FTX Arena deal, according to Mr. Dabir, FTX confidentially
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`disclosed to Miami-Dade County and the Miami Heat FTX’s balance sheet—which was comprised
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`almost entirely of customer funds—and he explained to Mr. Pompliano that “there are ways to
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`structure these deals in a way where, you know, you can front load some of the funds, right, to-to
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`provide some more comfort.” Id.
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`12. Mr. Dabir explained that there were multiple ways that FTX measured the success
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`of their Brand Ambassador program, with the “obvious one [being] straight up conversion,” as in
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`“[h]ow many people in Florida download the app or around the Miami area, download the app,
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`register, deposit, trade, you know, it’s that standard sort of funnel that’s very easy to track.” Id., at
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`6. But the other method, according to Mr. Dabir, is the “intangible element” of “trust” and
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`“legitimacy” that comes from “building trust and value through brand association,” like “I’ve
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`already heard of FTX because of FTX Arena, or I saw your Super Bowl spot with-with Larry
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`David.” Id.
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`13. Mr. Dabir also explains how he oversaw and participated in the creation of Larry
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`David’s now infamous 2022 Super Bowl ad, and recounting, “when we saw the script, we were
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`like, this script is awesome. And then-then we’re like, ‘We have to get Larry David, right?’ And
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`then, you know, the teams went to work to try, and I don’t know if that commercial works, if it’s
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`not Larry David, right?” Id., 7.
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`5
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`

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`Case 1:22-cv-23753-KMM Document 205 Entered on FLSD Docket 05/15/2023 Page 6 of 294
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`Edwin Garrison, et al. v. Samuel Bankman-Fried, et al.
`Amended Class Action Complaint and Demand for Jury Trial
`Crucially, all FTX employees or agents who were involved in the Larry David
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`14.
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`Super Bowl commercial ultimately reported to Avi Dabir, who had final approval of all aspects of
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`the commercial from his base of operations in Miami.
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`15. Mr. Dabir also went into detail about his dealings with Tom Brady and Giselle
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`Bündchen and how the individual FTX Brand Ambassador partnership deals worked. Id., 9.
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`Importantly, not only was Mr. Dabir directly involved in negotiating and consummating the
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`individual FTX Brand Ambassador partnership deals from his base in Miami, he also explains that
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`Defendants Brady and Bündchen were instrumental in bringing other FTX Brand Ambassadors
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`into the fold, such as Defendant Curry. Id.
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`16.
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`FTX will be involved in federal bankruptcy proceedings for many years and there
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`is no guarantee that any of the victims will be able to see any recovery from those proceedings.
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`This Federal Consolidated Action may be the only avenue for any of the victims to recover any of
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`their damages. This action is specifically brought against persons and celebrities who were
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`specifically warned by the SEC back in 2017 (and in many FTC Guidelines), that if they promote
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`cryptocurrency products like the Deceptive FTX Platform, YBAs, or FTT, and those products are
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`found to be “securities,” those people may be liable under state and/or federal regulations for: (1)
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`promoting an unregistered security, or (2) failing to properly disclose their payments and
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`compensation. Those specific claims have a strict liability standard with no caveat emptor defense.
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`17.
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`The question of whether the promotion of the Deceptive FTX Platform, the sale of
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`every YBA and/or FTT is (or is not) the sale of “unregistered securities” has practically been
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`answered in the affirmative through various regulatory statements, guidance, and actions issued
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`6
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`

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`Case 1:22-cv-23753-KMM Document 205 Entered on FLSD Docket 05/15/2023 Page 7 of 294
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`Edwin Garrison, et al. v. Samuel Bankman-Fried, et al.
`Amended Class Action Complaint and Demand for Jury Trial
`by the Securities and Exchange Commission and other regulatory entities. For example, on
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`November 1, 2017, in the “SEC Statement Urging Caution Around Celebrity Backed ICOs,”2
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`In the SEC’s Report of Investigation concerning The DAO,3 the Commission
`warned that virtual tokens or coins sold in ICOs may be securities, and those who
`offer and sell securities in the United States must comply with the federal securities
`laws. Any celebrity or other individual who promotes a virtual token or coin that is
`a security must disclose the nature, scope, and amount of compensation received in
`exchange for the promotion. A failure to disclose this information is a violation of
`the anti-touting provisions of the federal securities laws. Persons making these
`endorsements may also be liable for potential violations of the anti-fraud
`provisions of the federal securities laws, for participating in an unregistered
`offer and sale of securities, and for acting as unregistered brokers. The SEC will
`continue to focus on these types of promotions to protect investors and to ensure
`compliance with the securities laws.
`The SEC and state securities regulators over the past 5 years, have already found
`18.
`
`liable numerous celebrities, cryptocurrency brokers and exchanges just like FTX for offering this
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`exact same type of interest-bearing account and native token, finding that exchanges such as
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`BlockFi,4 Voyager,5 and Celsius6 all offered these same products as unregistered securities.
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`19.
`
`A second narrow issue that is common to the entire Proposed Class, whose focus is
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`also solely objective, is whether these Defendants violated state consumer laws by failing to abide
`
`
`2
`https://www.sec.gov/news/public-statement/statement-potentially-unlawful-promotion-icos
`(accessed May 11, 2023).
`3 https://www.sec.gov/litigation/investreport/34-81207.pdf (accessed May 11, 2023).
`4 https://www.sec.gov/news/press-release/2022-26 (accessed May 11, 2023).
`5
`https://coingeek.com/6-us-regulators-crackdown-on-voyager-digital-over-interest-bearing-
`accounts/ (accessed May 11, 2023).
`6
`https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved
`=2ahUKEwjvjNvg27j7AhWfRTABHfwzDe4QFnoECAsQAQ&url=https%3A%2F%2Fwww.nj.
`gov%2Foag%2Fnewsreleases21%2FCelsius-Order-
`9.17.21.pdf&usg=AOvVaw0Zd94fuhFSsOoGKM-vQ3YI (accessed May 11, 2023).
`
`7
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`Edwin Garrison, et al. v. Samuel Bankman-Fried, et al.
`Amended Class Action Complaint and Demand for Jury Trial
`by any of the FTC’s long-established rules and regulations, specifically on what is required for a
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`celebrity endorsement of cryptocurrency.
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`20. We all need to be clear. This is not a case where Plaintiffs made a “risky”
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`investment in stock or cryptocurrency, or that they lost money speculating on various
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`cryptocurrency projects. Plaintiffs’ claims arise simply from the purchase of and investment in the
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`Deceptive FTX Platform, FTT, and/or a YBA, a savings type of account with FTX that every
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`customer who signed up for the FTX app received by default, and which, as explained below, was
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`guaranteed to generate returns on their significant holdings in the accounts, regardless of whether
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`those assets were held as USD, legal tender or cryptocurrency, and regardless of whether any trades
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`were made with the assets held on the Deceptive FTX Platform or in the YBA. In other words, the
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`Deceptive FTX Platform and YBAs were portrayed to be like a bank account, something that was
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`“very safe” and “protected.” That is the narrative that Defendants pushed in promoting the
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`Deceptive FTX Platform and the offer and sale of YBAs and/or FTT, all of which are unregistered
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`securities. For that, Defendants are liable for Plaintiffs’ losses, jointly and severally and to the
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`same extent as if they were themselves the FTX Group.
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`21.
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`Literally overnight, Plaintiffs’ assets, including FTT,7 held on the Deceptive FTX
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`Platform and/or in their YBAs were robbed from them as FTX imploded and former-CEO, Sam
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`7 Although the FTX Group purported to maintain a separation between the US and International
`platform—in large part because it knew its products offered on the international exchange were
`securities required to be registered with securities regulators—the separation was merely a farce
`and was easily circumvented (which was something that the FTX Group encouraged) through the
`use of, for instance, a VPN. See https://blockduo.com/ftx-usa/ (“FTX, like other crypto exchanges,
`uses something called geo-blocking to stop users from restricted countries from using the
`exchange. They do this by seeing where your IP address is, and if it is from one of the banned
`countries, they will block you from the site. With the now wide availability of VPNs, this can be
`bypassed”) (accessed May 11, 2023). The use of VPNs to circumvent geo-blocking for
`cryptocurrency exchanges is a well-known and widely used method encouraged by the exchanges
`
`
`8
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`

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`Edwin Garrison, et al. v. Samuel Bankman-Fried, et al.
`Amended Class Action Complaint and Demand for Jury Trial
`Bankman-Fried, filed a Chapter 11 bankruptcy petition in Delaware on an emergency basis. This
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`happened because, as explained by the new CEO of the failed FTX Group:
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`I have over 40 years of legal and restructuring experience. I have been the
`Chief Restructuring Officer or Chief Executive Officer in several of the largest
`corporate failures in history. I have supervised situations involving allegations of
`criminal activity and malfeasance (Enron). I have supervised situations involving
`novel financial structures (Enron and Residential Capital) and cross-border asset
`recovery and maximization (Nortel and Overseas Shipholding). Nearly every
`situation in which I have been involved has been characterized by defects of some
`sort in internal controls, regulatory compliance, human resources and systems
`integrity.
`Never in my career have I seen such a complete failure of corporate controls
`and such a complete absence of trustworthy financial information as occurred
`here. From compromised systems integrity and faulty regulatory oversight abroad,
`to the concentration of control in the hands of a very small group of inexperienced,
`unsophisticated and potentially compromised individuals, this situation is
`unprecedented.
`See In re: FTX Trading Ltd, et al., No. 22-11068 (JTD), ECF No. 24, ¶¶ 4–5 (D. Del. Nov. 17,
`
`2022) (emphasis added).
`
`22.
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`The Cryptocurrency National Disaster is growing by the billions almost every day.
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`More crypto companies are filing new federal bankruptcy petitions each day, all running for
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`protection from the billions of dollars of losses they directly caused to thousands of investors here
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`in Florida and across the globe. This is by far the largest securities national disaster, greatly
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`surpassing the Madoff Ponzi Scheme, and could very likely become a complex international
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`litigation disaster, similar to how the hundreds of thousands of asbestos cases swamped all courts
`
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`to rake in as many new U.S.-based customers as possible to keep new funds loading onto their
`platform. See CFTC v. Changpeng Zhao, et al., No. 1:23-cv-01887, ECF No. 1 (N.D. Ill. Mar. 27,
`2023) (CFTC enforcement action brought because “Binance and its officers, employees, and
`agents have instructed U.S. customers to use virtual private networks (‘VPNs’) to obscure their
`location; allowed customers that had not submitted proof of their identity and location to continue
`to trade on the platform long after announcing such conduct was prohibited; and directed VIP
`customers with ultimate beneficial owners, key employees who control trading decisions, trading
`algorithms, and other assets all located in the United States to open Binance accounts under the
`name of newly incorporated shell companies to evade Binance’s compliance controls.”).
`
`9
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`

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`Edwin Garrison, et al. v. Samuel Bankman-Fried, et al.
`Amended Class Action Complaint and Demand for Jury Trial
`across the globe. Unless a workable, coordinated, and organized structure is established now, at
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`the very onset of these proceedings, here in Miami, which served as the epicenter for the crypto
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`fraud, the FTX victims will continue to suffer and the only people to benefit will be the
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`professionals in the bankruptcy and civil courts.
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`23.
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`The Deceptive and failed FTX Platform all emanated from here in Miami, Florida,
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`FTX’s domestic headquarters and the host of the largest and most famous International World
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`Cryptocurrency Conventions. FTX’s fraudulent scheme was designed to take advantage of
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`unsophisticated investors from across the globe, who utilize mobile apps to make their
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`investments. As a result, consumers around the globe collectively sustained billions of dollars in
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`damages. FTX organized and emanated its fraudulent plan from its worldwide headquarters
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`located here in Miami, Florida. Miami became the “hot spot” for crypto companies, hosting the
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`most investments in crypto startups as well as the annual Bitcoin Miami 2022 Global Forum.
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`Several crypto companies, including crypto exchange Blockchain.com, Ripple and FTX.US,
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`moved their headquarters to Miami. Others, including fellow exchange eToro, expanded their U.S.
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`presence with offices in Miami. FTX was already very familiar with Miami, signing a deal worth
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`more than $135 million dollars for the naming rights of the waterfront arena, where 3-time NBA
`
`Champions the Miami Heat play.
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`FACTUAL BACKGROUND
`
`24.
`
`Undersigned Counsel have been investigating and litigating these specific issues
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`for over a year before this Court. On December 24, 2021, counsel for Plaintiffs and the proposed
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`class members brought the first (and only) putative nationwide class action complaint against the
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`now-defunct cryptocurrency trading app, Voyager, styled Mark Cassidy v. Voyager Digital Ltd.,
`
`et al., Case No. 21-24441-CIV-ALTONAGA/Torres (the “Cassidy Action”), alleging that the
`
`10
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`Edwin Garrison, et al. v. Samuel Bankman-Fried, et al.
`Amended Class Action Complaint and Demand for Jury Trial
`platform owned and operated by Voyager Digital Ltd. (“Voyager”) and Voyager Digital LLC
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`(“VDL”) was an unregulated and unsustainable fraud. In the Cassidy Action, plaintiffs also alleged
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`that Defendant Ehrlich, Voyager’s CEO, teamed up with Defendants Cuban and the Dallas
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`Mavericks to promote Voyager, by making false representations and employing other means of
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`deception. As a result, the Voyager plaintiffs and Voyager class members, all sustained losses in
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`excess of $5 billion.
`
`25.
`
`The allegations in the Cassidy complaint—and specifically Mark Cuban’s role in
`
`promoting Voyager—received national attention. See https://www.jdsupra.com/legalnews/new-
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`lawsuits-target-cryptocurrency-9604406/ (summarizing the allegations and explaining that “Mark
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`Cuban, owner of the NBA’s Dallas Mavericks, is a major stakeholder in Voyager. The complaint
`
`alleges that he made comments at a press conference in which he specifically targeted
`
`unsophisticated investors ‘with false and misleading promises of reaping large profits in the
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`cryptocurrency market.’”); https://www.law.com/dailybusinessreview/2021/12/29/mark-cuban-
`
`linked-crypto-platform-hit-with-florida-nationwide-class-action-lawsuit-in-miami-federal-
`
`court/?slreturn=20220701214901 (same, in the Daily Business Review).
`
`26.
`
`After the Cassidy Complaint was filed, the following important actions took place:
`
`(a)
`
`(b)
`
`the United States Securities and Exchange Commission (SEC)
`began an enforcement review focused on whether Voyager’s Earn
`Program Accounts (“EPAs”) constitute unregistered securities;
`seven state Attorneys General (New Jersey, Alabama, Kentucky,
`Oklahoma, Texas, Vermont and Washington) took specific action
`finding that Voyager was violating their state laws, including issuing
`“cease and desist” letters to Voyager, finding that the EPA was an
`unregistered security, prohibiting the crypto-asset broker-dealer
`from selling any more unregistered securities (finding that Voyager
`used these EPAs to raise millions of dollars in revenue worldwide
`as of March 1, 2022; and
`
`11
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`Case 1:22-cv-23753-KMM Document 205 Entered on FLSD Docket 05/15/2023 Page 12 of 294
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`(c)
`
`Edwin Garrison, et al. v. Samuel Bankman-Fried, et al.
`Amended Class Action Complaint and Demand for Jury Trial
`on March 29, 2002, the State of New Jersey Bureau of Securities
`entered a Cease and Desist Order against Voyager, finding that the
`EPA was not exempt from registration under the law, and instead
`that it must be registered—and as a result, Voyager’s stock price
`tanked by 25% in a day and is down over 80% for the year.8
` On July 5, 2022, Voyager Digital Holdings, Inc. and two affiliated debtors
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`27.
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`(collectively, the “Debtors”) filed voluntary petitions for relief under chapter 11 of Title 11 of the
`
`United States Code. Voyager’s bankruptcy cases (the “Voyager Bankruptcy Cases”) are jointly
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`administered under Case No. 22-10943 before the Honorable Michael E. Wiles in the United States
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`Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”).
`
`28.
`
`On September 28, 2022, Voyager filed a motion in the Voyager Bankruptcy Cases
`
`seeking authority to enter into an asset purchase agreement with West Realm Shires Inc., d/b/a
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`FTX US whereby Voyager will sell substantially all of its assets for a purchase price of
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`approximately $1.422 billion, which includes (i) the value of cryptocurrency on the Voyager
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`platform as of a date to be determined, which, as of September 26, 2022, is estimated to be $1.311
`
`billion, plus (ii) additional consideration which is estimated to provide at least approximately $111
`
`million of incremental value to the Debtors’ estates.
`
`29.
`
`Everyone involved in the Voyager Bankruptcy Cases thought that the FTX Group
`
`were the deus ex machina come to save the day by bailing out Voyager and paying back at least
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`some of the losses the Voyager customers sustained.
`
`30.
`
`Instead, as explained below, the FTX Group imploded, their over $30 billion in
`
`value evaporated almost overnight, and the FTX Group found themselves filing their own
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`emergency Chapter 11 bankruptcy petition in Delaware. The Deceptive FTX Platform maintained
`
`
`8
`https://seekingalpha.com/article/4498956-voyager-digital-plunged-25-percent-heres-why
`(accessed October 28, 2022); https://seekingalpha.com/article/4503716-voyager-digital-buy-dip-
`during-crypto-crash (accessed May 11, 2023).
`
`12
`
`

`

`Case 1:22-cv-23753-KMM Document 205 Entered on FLSD Docket 05/15/2023 Page 13 of 294
`
`Edwin Garrison, et al. v. Samuel Bankman-Fried, et al.
`Amended Class Action Complaint and Demand for Jury Trial
`by the FTX Group was truly a house of cards, a Ponzi scheme where the FTX Group shuffled
`
`customer funds between their opaque affiliated entities, using new investor funds obtained through
`
`investments in the Deceptive FTX Platform, the YBAs, FTT, and/or loans to pay interest and
`
`investment withdrawals to the old ones and to attempt to maintain the appearance of liquidity.
`
`31.
`
`Part of the scheme employed by the FTX Group involved utilizing some of the
`
`biggest names in sports and entertainment to raise funds and drive global consumers to invest in
`
`the Deceptive FTX Platform, the YBAs, and/or FTT, which were offered and sold largely from
`
`the FTX Group’s domestic base of operations here in Miami, Florida, pouring billions of dollars
`
`into the Deceptive FTX Platform to keep the whole scheme afloat.
`
`32.
`
`Importantly, although Defendants disclosed their partnerships with the FTX Group,
`
`they have never disclosed the nature, scope, and amount of compensation they personally received
`
`in exchange for the promotion of the Deceptive FTX Platform, which the SEC has explained that
`
`a failure to disclose this information would be a violation of the anti-touting provisions of the
`
`federal securities laws.9
`
`33. Moreover, as explained in detail below, there were clear red flags that sophisticated
`
`investors like the FTX Brand Ambassador Defendants would be able to identify while doing any
`
`modicum of due diligence to either ask follow up questions or decline the opportunity to conduct
`
`further business together.
`
`34.
`
`The fact that the FTX Brand Ambassadors jumped at the opportunity to work with
`
`the FTX Group—and be paid millions, tens of millions, or even hundreds of millions in cash,
`
`
`9
`https://www.ubergizmo.com/2017/11/sec-celebrities-disclose-payment-cryptocurrency-
`endorsements/#:~:text=It%20has%20issued%20a%20statement%20warning%20celebrities%20t
`hat,without%20disclosing%20that%20they%E2%80%99ve%20been%20paid%20for%20it
`(accessed May 11, 2023).
`
`13
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`

`

`Case 1:22-cv-23753-KMM Document 205 Entered on FLSD Docket 05/15/2023 Page 14 of 294
`
`Edwin Garrison, et al. v. Samuel Bankman-Fried, et al.
`Amended Class Action Complaint and Demand for Jury Trial
`equity stakes, and/or cryptocurrency to do so—is strong circumstantial evidence that these FTX
`
`Brand Ambassador Defendants had actual knowledge that the FTX Group was a fraudulent Ponzi
`
`scheme that was converting its customers’ funds for its own use. Yet, they still participated in the
`
`FTX Group’s scheme, and proximately caused the damages to the Plaintiffs and the Class.
`
`35.
`
`The SEC took action against boxing champ Floyd Mayweather and music producer
`
`DJ Khaled after they were paid by cryptocurrency issuers to tweet promotional statements about
`
`investing in Initial Coin Offerings (ICOs), ordering them both to pay disgorgement, penalties and
`
`interest for promoting investments in ICOs, including one from cryptocurrency issuer Centra Tech,
`
`Inc., for a combined total of $767,500 because they failed to disclose that their promotional efforts
`
`on Twitter were paid endorsements.10
`
`36.
`
`Other celebrities similarly accused and prosecuted for failing to disclose their paid
`
`endorsements include Kim Kardashian and basketball player Paul Pierce.11 According to the
`
`Federal Trade Commission, cryptocurrency scams have increased more than ten-fold year-over-
`
`year with consumers losing more than $80 million since October 2020, due in large part to the use
`
`of such celebrity endorsements. 12
`
`37.
`
`As explained more fully in this Complaint, Defendants’ misrepresentations and
`
`omissions made and broadcast around the globe through the television and internet render them
`
`liable to Plaintiff and class members for soliciting and/or personally participating in their purchases
`
`of the unregistered Deceptive FTX Platform, YBAs, and/or FTT. Wildes v. Bitconnect Int’l PLC,
`
`
`10
`https://news.bloomberglaw.com/us-law-week/insights-celebrity-endorsements-and-
`cryptocurrency-a-cautionary-tale (accessed May 11, 2023).
`11
`https://blockbulletin.com/news/altcoins/kim-kardashian-among-other-celebrities-sued-for-
`promoting-cryptocurrencies/ (accessed May 11, 2023).
`12 https://florida.foolproofme.org/articles/770-celebrity-cryptocurrency-scam (accessed May 11,
`2023).
`
`14
`
`

`

`Case 1:22-cv-23753-KMM Document 205 Entered on FLSD Docket 05/15/2023 Page 15 of 294
`
`Edwin Garrison, et al. v. Samuel Bankman-Fried, et al.
`Amended Class Action Complaint and Demand for Jury Trial
`No. 20-11675 (11th Cir. Feb. 18, 2022) (holding that promoters of cryptocurrency through online
`
`videos could be liable for soliciting the purchase of unregistered securities through mass
`
`communication, and no “personal solicitation” was necessary for solicitation to be actionable).
`
`38.
`
`This action seeks to hold Defendants responsible for the many billions of dollars in
`
`damages they caused Plaintiffs and the Class and to force Defendants to make them whole.
`
`PARTIES
`Each Plaintiff is among the class of individuals the FTX Brand Ambassador
`
`39.
`
`Defendants, through their paid promotions on behalf of FTX, influenced or attempted to influence
`
`to invest in FTX crypto-related securities, and each Plaintiff made such investments after being
`
`exposed to some or all of the FTX Brand Ambassador Defendants’ promotional activities
`
`described in this Complaint. In addition, each Plaintiff was harmed by the conduct of the FTX
`
`Insider Defendants, including their promotion and maintenance of the Deceptive FTX Platform,
`
`their participation in FTX’s offering or sale of unregistered securities, and their misrepresentations
`
`and omissions regarding the FTX Platform.
`
`40.
`
`Plaintiff Edwin Garrison is a citizen and resident of the State of Oklahoma. He is
`
`a natural person over the age of 21 and is otherwise sui juris. Plaintiff Garrison purchased,
`
`repurchased,
`
`invested,
`
`reinvested, deposited and/or
`
`transferred additional
`
`funds or
`
`cryptocurrencies on the Deceptive FTX Platform and/or his YBA and/or purchased, repurchased,
`
`invested, and/or reinvested in FTT Tokens after being exposed to some or all of Defendants’
`
`misrepresentations and omissions regarding the