FTX failed last year amid allegations of fraud, wiping away billions of dollars of customer and investor money and shaking the cryptocurrency markets. Sam Bankman-Fried, the exchange’s founder and former CEO, faces a number of financial crime charges to which he has pleaded not guilty.
A number of celebrities who had carelessly agreed to endorse the cryptocurrency, were not only embarrassed in the debacle, but are facing a lawsuit as well.
Taylor Swift may have been the only celebrity with doubts about the legality of FTX before the cryptocurrency exchange collapsed last year, according to a lawyer leading a class-action lawsuit against the group’s high-profile ambassadors.
Adam Moskowitz, a key attorney in the class-action lawsuit against the celebrity ambassadors who promoted FTX, said legal discovery proceedings revealed that Swift did due diligence on FTX. Moskowitz made the comments on The Block’s The Scoop podcast released Wednesday.
Among those named in the lawsuit, which alleges that celebrities endorsed a potential fraud—and potentially promoted unregistered securities—are football star Tom Brady, basketball icon Shaquille O’Neal, and businessman Kevin O’Leary.
“None of these Defendants performed any due diligence prior to marketing these FTX products to the public,” the lawsuit alleges.
Swift was the sole exception. “The one person I found that did that was Taylor Swift,” Moskowitz said on The Scoop podcast, in response to a question from host Frank Chaparro on why some celebrities didn’t seem to talk to lawyers before signing contracts to make sure they would not be peddling unregistered securities.
“In our discovery Taylor Swift actually asked that: ‘Can you tell me that these are not unregistered securities?’” Moskowitz said. That, apparently, was the magic question that every one of the celebrities courted by FTX should have asked.
It makes the music artist a rarity in choosing not to be linked with FTX, which not only attracted high-profile brand ambassadors but a body of venture-capital and pension fund investors.
Elon Musk, isn’t surprised that Swift appears to have been skeptical enough to turn down a deal that according to The Financial Times, was worth $100 million.
Musk tweeted Wednesday in response to a post about Swift’s due diligence on FTX. “Taylor is smart and her father is a well-regarded investment banker.”
