Social Media and YouTube Influencers Accused of Promoting FTX without Proper Disclosure

Social Media and YouTube Influencers Accused of Promoting FTX without Proper Disclosure

UTC by Mercy Tukiya Mutanya · 3 min read
Social Media and YouTube Influencers Accused of Promoting FTX without Proper Disclosure
Photo: Depositphotos

Defendant Ben Armstrong denied the allegations and stated that he had never been in contact with anyone at FTX.

A group of social media influencers has been named in a new lawsuit alleging they promoted collapsed crypto exchange FTX to their millions of followers without proper disclosure. According to the suit, filed on Wednesday, the influencers failed to disclose the nature of any, rewards, payments, or compensation realized from promoting the crypto exchange.

The influencers named in the lawsuit include Erika Kullberg, Ben “BitBoy” Armstrong and Kevin Paffrath, known as “Meet Kevin” on YouTube. Some YouTube creators have allegedly deleted “all video clips endorsing FTX and praising Sam Bankman-Fried ” from their channels. The lawsuit states that they have since posted apology messages about their perceived support of the embattled exchange which is currently under investigation both in the United States and abroad and is speculated to owe as much as $3.1 billion to its top 50 creditors.

The lawsuit quotes Paffrath saying in a November 22 YouTube video:

“Yes, I used to be sponsored by FTX. I think that is a disgrace. And it’s a scar. And it sucks. If I could go back I would change it, because people got hurt because of that. I feel so terribly about that. People got hurt because of FTX and it’s a disgrace.”

Plaintiffs in the lawsuit, which is seeking class-action status, are being represented by Adam Moskowitz of the Moskowitz Law Firm. Moskowitz is also involved in another FTX-related lawsuit, this one with celebrities such as Tom Brady and Gisele Bündchen being sued for ‘actively participating’ in the “offer and sale of unregistered securities in the form of yield-bearing accounts.”

“Though FTX paid Defendants handsomely to push its brand and encourage their followers to invest, Defendants did not disclose the nature and scope of their sponsorships and/or endorsement deals, payments and compensation,” the lawsuit claims. “This action may be one of the only avenues for any of the victims to recover any of their damages.”

The seven plaintiffs named in the lawsuit are both from within the U.S. and outside. They claim to have suffered damages after purchasing “an unregistered security from FTX in the form of a YBA [yield-bearing account]” which the defendants promoted for the financial benefit of themselves and/or FTX. The lawsuit identified classes of plaintiffs from around the world which make up “thousands, if not millions, of consumers globally, to whom FTX offered and/or sold YBAs.” It is demanding that “a sum exceeding $1,000,000,000.00” be paid to the plaintiffs as damages.

Meanwhile, defendant Ben Armstrong has threatened to countersue, denying the allegations and stating that he had never been in contact with anyone at FTX.

Blockchain News, Cryptocurrency News, News
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