Taylor Swift turned down a multi-million dollar deal and saved herself from what was later discovered as one of the biggest scandals in cryptocurrency. Adam Moskowitz, the attorney leading a class-action lawsuit against several FTX promoters, appeared on "The Scoop" podcast to discuss details. According to Moskowitz, the plaintiffs are seeking over $5 billion in damages from celebrity endorsers, including Shaquille O'Neal, Stephen Curry, Tom Brady, and Larry David, among others. Those charged also include “Mean Girls” star Lindsay Lohan, social media influencer and boxer Jake Paul, and porn actor Kendra Lust. Musicians like Lil Yachty, Soulja Boy, Ne-Yo, Austin Mahone and Akon were also named in the agency’s complaint.
The celebrities allegedly didn't do their due diligence to check whether FTX was breaking the law. "The one person I found that did, was Taylor Swift," Moskowitz told The Scoop, adding that Swift never confirmed nor promoted a deal with the now-bankrupt exchange. According to FTX promoters, Taylor Swift turned down a $100 million sponsorship deal from the crypto exchange because she was the only celebrity who raised concerns about their practices. The singer, whose father used to work for Merrill Lynch, had started discussing the sponsorship deal for her $100 million tour with FTX in the fall of 2021. During the negotiations, Taylor Swift had asked FTX if they could confirm that their offerings were not unregistered securities.
It is a well-known fact in the securities industry that all securities sold and offered in the US must be registered with the Securities and Exchange Commission. Last December, the SEC filed a complaint against FTX executives, stating that their cryptocurrency, FTT, was considered a security because it was sold as an investment contract and had not been appropriately registered. Consequently, Moskowitz's lawsuit alleges that the celebrities who endorsed FTX had promoted an unregistered security and aims to recover damages for customers who lost money after FTX filed for bankruptcy in November. Since Taylor Swift declined the promotion after clarifying that the security was in fact unregistered, she has been excluded from the class action lawsuit. This case demonstrates why investors should be prepared and educated on compliance and regulation within the securities industry when conducting investments.
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