The Golden State Warriors Named In Class Action Lawsuit Over Partnership With FTX
CNBC reports that FTX founder Sam Bankman-Fried was arrested in The Bahamas on December 12th, 2022 on a wide range of criminal charges. Mr. Bankman-Fried and the company stand accused of swindling investors out of more than $8 billion. Civil lawsuits have already been filed—and some relief defendants have been named, including the NBA’s Golden State Warriors. According to a report from Gizmodo, the team is being sued based on its partnership with FTX. Within this article, our Miami partnership dispute attorney provides a more comprehensive overview of the allegations raised in this case.
Background: FTX Collapsed—Massive Fraud Suspected
FTX Trading Ltd. (FTX) is a company that operates a cryptocurrency exchange. It was one of the world’s largest exchanges. In November, the company suddenly suspended customer redemptions. Soon after, it filed for bankruptcy protection. FTX—and its founder Sam Bankman-Fried—claim that a “liquidity crisis” driven by a run on customer withdrawals caused its collapse. Federal prosecutors allege that the company was actually engaged in serious fraud.
The Golden State Warriors Lawsuit Over Partnership With FTX
Prior to its sudden collapse, FTX spent an enormous amount of money on advertising, including marketing targeted at the American sports audience. Indeed, FTX currently has the naming rights for the arena where the NBA’s Miami Heat play their games. The Golden State Warriors entered into a business partnership with FTX. The team has now been named as a defendant in a class action lawsuit filed by customers of FTX who sustained financial losses when the company suspended its redemptions. The named plaintiff reports $750,000 in losses as an FTX customer.
According to the lawsuit, FTX materially misled customers about the safety and security of their funds. The lawsuit alleges that the Golden State Warriors bear liability as a promoter of the service. The Warriors have a business partnership with FTX. The team has released an “exclusive” NFT collection the FTX platform and displays the FTX logo on its court in the NBA 2k video game series. There are also other business arrangements.
Business Partnerships are Complicated: An Attorney is a Valuable Resource
Business partnerships can be complicated, especially when it comes to legal issues and contracts. It is important to have a lawyer involved in the process to ensure that all parties are protected and that the partnership is structured in a way that is fair and beneficial for everyone involved. Any type of business partnership carries risk—both internally and externally. An experienced Florida partnership law attorney can help parties evaluate and alleviate risk associated with the agreement.
Consult With Our South Florida Partnership Lawyer Today
At Pike & Lustig, LLP, our Florida partnership attorneys are committed to finding solutions for our clients. If you are locked in a partnership dispute, we are here to help you find the best path forward. Contact us now for a completely confidential. With offices in Miami, West Palm Beach, and Wellington, our firm provides partnership dispute representation throughout the whole area.