Taylor Swift avoided the class action lawsuit against FTX’s celebrity promoters by simply asking about unregistered securities — and coming to her own conclusions.
The lawyer handling the class-action lawsuit against those celebrities spoke about the case on ‘The Scoop’ podcast. The collective plaintiffs are seeking over $5 billion from celebrities like Tom Brady, Larry David, and Shaquille O’Neal. Moskowitz says celebrities didn’t do their due diligence before promoting FTX—but Taylor Swift did.
“The one person I found that did [due diligence] was Taylor Swift,” Moskowitz told podcast host Frank Chaparro. He says Swift discussed a $100 million endorsement of the cryptocurrency exchange but pulled out and never promoted it. The sponsorship discussed in 2021 might have included NFT tickets, though marketing staff felt the deal was too expensive.
“In our discovery, Taylor Swift actually asked them [FTX], ‘Can you tell me that these are not unregistered securities?” Moskowitz says of the pop star. Securities are tradable assets that hold value, such as stocks or bonds. All securities sold in the United States must be registered with the Securities and Exchange Commission. The SEC alleges that FTX’s FTT token is a security sold as an investment contract, but it was not properly registered with the SEC.
The FTX cryptocurrency exchange imploded in November 2022 after a series of tweets spooked investors into withdrawing their funds. FTX didn’t have enough money to fulfill the demand and founder Sam Bankman-Fried was arrested in the Bahamas a month later. He is facing over 100 years in prison on charges of securities fraud, money laundering, and bribery.
Taylor Swift’s increased scrutiny before accepting any promotional deal may have saved her a major headache. Other celebrity endorsers include supermodel Gisele Bündchen, NBA player Stephen Curry, tennis player Naomi Osaka, baseball player David Ortiz, and Shark Tank’s Kevin O’Leary. This isn’t the first time celebs have been in hot water over promoting cryptocurrency scams. Kim Kardashian, Floyd Mayweather Jr., and others were sued after failing to disclose they were paid to endorse the EthereumMax token.