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FTX Influencers in Trouble While Advisors Pocket $103M in Q1

AA News - Chayanika Deka 2023-05-03 19:15

A handful of influencers famed for their personal finance expertise on YouTube are being chased hard by victims who lost their fortunes in FTX’s collapse.

One such is crypto YouTuber Tom Nash – he was served a lawsuit through a tweet after a Florida district court judge granted the Moskowitz Law Firm permission for the action.

Served on Twitter

Nash, a Sydney resident, is among ten defendants named in a class-action lawsuit that claims influencers played a “major role” in the FTX scandal. It also states that the crypto exchange wouldn’t have risen to such heights without their backing and “hype.” Despite promoting and being “handsomely” paid in return, these influencers have failed to disclose their compensation.

@iamtomnash, per the authorization of the Court presiding over the pending class action against you in the Southern District of Florida, you have been served:

— The Moskowitz Law Firm (@moskowitzesq) May 2, 2023

Nash was the only holdout among the various defendants, some of which include Kevin Paffrath, Graham Stephan, Andrei Jikh, and Jaspreet Singh, among others.

Besides, YouTuber and Crypto Twitter personality Ben Armstrong (aka BitBoy Crypto), who was also named in the lawsuit, missed a court appearance ordered by a federal magistrate judge last month. He even went as far as to mock openly the federal judge’s authority, tweeting pictures of himself on a beach on the same day he was slated for an ordered court appearance.

The lead attorney representing the plaintiffs in the case – Moskowitz – claimed that Armstrong harassed the legal team with “endless phone calls, tweets, and emails,” voicemails “full of vulgarities,” and social media posts suggesting threats. The judge later banned Armstrong from tweeting about Moskowitz and the plaintiffs in the case.

Advisors Raking in Millions

FTX collapsed over ten days last November with its disgraced CEO Sam Bankman-Fried on house arrest ahead of a trial in October. The former exec is accused of being a mastermind in a yearslong fraud of using billions of dollars of FTX customer funds for personal expenses and high-risk bets through the exchange’s sister trading house, Alameda Research.

Victims have lost million of funds as a result, but the advisers overseeing the ruins of the FTX Group will reportedly rake in $103 million over the first quarter.

Five firms – Sullivan & Cromwell, Alvarez & Marshal, AlixPartners, Quinn Emmanuel Urquhart & Sullivan, and Landis Rath & Cobb – have billed FTX a total of $36.4 million in March alone. The paychecks for these five law firms for January and February, on the other hand, stood at $34.2 million and $32.5 million, respectively.

New York-based Sullivan & Cromwell has billed the biggest invoice of $14.1 million in fees and expenses for March, taking its total all the way to $44.4 million in Q1.

The post FTX Influencers in Trouble While Advisors Pocket $103M in Q1 appeared first on CryptoPotato.