FTX crypto collapse 'a real crisis' for investors: Attorney Adam Moskowitz
Edwin Garrison, plaintiff in the class-action lawsuit against FTX, and his attorney Adam Moskowitz weigh in on the collapsed crypto empire and what the situation means for investors.
The plaintiff in a class-action lawsuit against fallen crypto exchange FTX's founder Sam Bankman-Fried and several high-profile celebrities spoke out Thursday about the detriment the scandal dominating the media has caused him and how his legal team hopes to win in court.
"[We need to prove] that they were misleading us and encouraging people to get into their system and invest in the company," Edwin Garrison told "America's Newsroom" host Bill Hemmer.
The 41-page document seeking repayment of $11 billion in damages was filed on behalf of the Oklahoma resident in the U.S. District Court’s Southern District of Florida after FTX filed for bankruptcy last week.
When pressed on how much money lost in the dustup, Garrison responded by saying "enough," but did not disclose a specific amount.
Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, during the Bloomberg Crypto Summit in New York, US, on Tuesday, July 19, 2022. (Jeenah Moon/Bloomberg via Getty Images)
The lawsuit, which names "Sam Bankman-Fried, Tom Brady, Gisele Bündchen, Stephen Curry, Golden State Warriors, Shaquille O’Neal, Udonis Haslem, David Ortiz, William Trevor Lawrence, Shohei Ohtani, Naomi Osaka, Lawrence Gene David, and Kevin O’Leary," seeks to make them "responsible for the many billions of dollars in damages they caused Plaintiff and the Classes and to force Defendants to make them whole."
"There's thousands of them," Garrison's attorney Adam Moskowitz said of the victims. "It's an emergency, and it's a real crisis here in Miami. There's over $30 billion that have been lost by investors of in Voyager, in FTX, in all the other cryptocurrencies that are going bankrupt.
"How these cases are organized from the very beginning is going to be crucial because it could take decades to go through billions of dollars in the bankruptcy court and the litigation courts. We can't let that happen," he added.
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Tom Brady and Gisele Bündchen, two mentioned in the class-action lawsuit against FTX. (Kevin Mazur/WireImage)
Moskowitz slammed the celebrities involved with FTX for convincing those like Garrison to invest while failing to disclose their own "personal, motivational stock[s] and money [earned]."
The sudden collapse has also raised major concerns about an industry that has remained largely unregulated.
Moskowitz said that although some of the responsibility for the losses "could" fall on investors, he argued "it doesn't matter when what you're doing is a fraud."
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"This was just a house of cards waiting to fall apart. Voyager crypto was just the same – it was a house of cards waiting to fall apart, so we're going to prove that the people like Mark Cuban that told these investors ‘trust us, we've done our due diligence, we've checked it out, it's safe investments,’ they were not telling the truth," he said.
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Both the company and Bankman-Fried are under investigation in the U.S. and other countries for possible securities violations amid allegations that FTX used $10 billion of customer funds to prop up Alameda Research, its affiliated trading firm.
Panels in both the Senate and the House are planning to hold hearings on FTX's collapse next month. The House Financial Services and Senate Banking committees plan December hearings that will examine the sudden demise of FTX under the leadership of Bankman-Fried, a Democratic mega-donor.
Fox News' Greg Norman and Megan Henney contributed to this report.