Ex-FTX compliance chief confirms celebrity promotional activity originated in Florida

FTX.US’ former chief compliance officer Daniel Friedberg has provided evidence confirming that the promotional activity involving celebrities originated in Florida, according to May 11 court filings.

The new development is a breakthrough in the class action lawsuit that is seeking billions from FTX and the celebrities that promoted it for the losses investors incurred from the exchange’s collapse. Friedberg is one of the defendants in the case linked to FTX.

The plaintiffs allege that the exchange conspired with celebrities to sell unlicensed securities without registering them under the guise of interest-bearing accounts. They further argue that under Florida state law, anyone that promotes unregistered securities is liable for customers’ losses.

Many of the celebrity defendants in the case have filed a motion to dismiss on the basis that Miami courts have no jurisdiction over the claims as FTX moved to Florida until late September 2022 and the agreements had been made well before that.

However, Friedberg’s evidence shows otherwise and could undermine the defense’s argument in court.

The evidence

According to the amended filing, Friedberg’s sworn testimony proves that FTX’s former vice president of business development Avinash “Avi” Dabir “began operating from FTX’s physical
offices in Miami, Florida, in early 2021.”

Dabir was responsible for managing the exchange’s brand ambassadors, which included many of the celebrity defendants, including Larry David, Shaquille O’Neal, Tom Brady, Gisele Bündchen and NBA team Golden State Warriors, among others.

The plaintiffs argue that Friedberg’s testimony should be included in the official evidence and the courts should reject the motion to dismiss the case and have requested the court to allow amending the case filings.

The Defense

Lawyers representing the celebrity defendants in the case argue that they cannot be liable for the losses as they only made general positive statements about the exchange in their adverts.

Additionally, the defense argues that these promotional ads never included any specific product that plaintiffs deem as unregistered securities.

Meanwhile, some of the defendants that are not based in Florida claim that they cannot be liable as Florida laws cannot apply to non-residents.

The defense lawyers have also filed a motion requesting the court to not allow any further amendments to the case filings, and if granted, it would exclude Friedberg’s latest testimony from the evidence.