Well well well....who's "The Man" now?
Taylor Swift didn't sign $100 million FTX sponsorship because she was the only one to ask about unregistered securities, lawyer says
- Taylor Swift pulled out of a $100 million sponsorship deal with Sam Bankman-Fried's FTX.
- A lawyer suing celebrities for promoting FTX says Swift alone asked about unregistered securities.
- Both Tom Brady and Stephen Curry are being sued for endorsing the now-bankrupt crypto exchange.
Taylor Swift avoided signing a
$100 million sponsorship deal with FTX because she was the only celebrity to question the crypto exchange, according to the lawyer handling a class-action lawsuit against several FTX promoters.
Adam Moskowitz appeared on
"The Scoop" podcast to discuss the
lawsuit, and said that the plaintiffs are seeking over
$5 billion from
FTX's celebrity endorsers, including Shaquille O'Neal, Tom Brady, and Larry David.
The lawyer alleged that celebrities didn't do their due diligence to check whether FTX was breaking the law. "The one person I found that did that was Taylor Swift," Moskowitz told The Scoop's Frank Chaparro, adding that Swift pulled out of the deal and never promoted the now-bankrupt exchange
The singer – whose
father used to work for Merrill Lynch – began discussing the $100 million-tour sponsorship with FTX in the fall of 2021, per the
Financial Times.
The terms included selling tickets as NFTs, although FTX marketing staff told the Times that "no one really liked the deal" and they thought it was "too expensive from the beginning."
"In our discovery, Taylor Swift actually asked them: 'Can you tell me that these are not unregistered securities?'" Moskowitz said.
A security is a tradeable asset that holds value, like a stock or a bond. All securities that are offered and sold in the US must be registered with the Securities and Exchange Commission. In a
complaint against FTX executives last December, the SEC said the company's cryptocurrency, FTT, is classified as a security because it was sold as an investment contract. It was not appropriately registered, however.
Moskowitz's lawsuit, therefore, accuses the celebrities of promoting an unregistered security and seeks to recover damages for customers who lost money after FTX filed for bankruptcy last November.
"In order to induce confidence and to drive consumers to invest in what was ultimately a Ponzi scheme," the suit claims that the defendants "made numerous misrepresentations and omissions."
The crypto exchange
imploded last November after concerns that the commingling of funds with its sister firm, Alameda, led to mass-customer withdrawals. It didn't have enough money to fulfill that demand, partly due to
lavish spending and a
$65 billion line of credit, lawyers said.
Sam Bankman-Fried, the founder and former CEO of FTX,
was arrested in the Bahamas a month later and faces over
100 years in prison if found guilty of charges including securities fraud, money laundering, and
bribery.
Representatives for Swift did not immediately respond to a request for comment from Insider. A spokesperson for Bankman-Fried declined to comment.