Investors in the failed FTX crypto exchange have sued its former chief executive and several celebrity voices that supported the platform.

The class-action lawsuit has been launched against Sam Bankman-Fried after the exchange collapsed last week, wiping billions of dollars’ worth of capital.

The suit also named a host of celebrity backers as defendants, including Larry David, Shaquille O’Neal and Naomi Osaka, which it claimed, “either controlled, promoted, assisted in, [or] actively participated in FTX Trading”.

Filed in Florida, the case is one of the first to attempt to hold celebrities who promoted the crypto platform responsible for their support.

The lawsuit, filed late on Tuesday, alleged these stars brought instant credibility to the platform, meaning that they as culpable as founder Bankman-Fried.

According to the lawsuit: “The Deceptive FTX Platform maintained by the FTX Entities was truly a house of cards, a Ponzi scheme where the FTX Entities shuffled customer funds between their opaque affiliated entities, using new investor funds obtained through investments in the YBAs and loans to pay interest to the old ones and to attempt to maintain the appearance of liquidity.

“Part of the scheme employed by the FTX Entities involved utilising some of the biggest names in sports and entertainment – like these Defendants – to raise funds and drive American consumers to invest in the [yield-bearing accounts], which were offered and sold largely from the FTX Entities’ domestic base of operations here in Miami, Florida, pouring billions of dollars into the Deceptive FTX Platform to keep the whole scheme afloat.”

FTX filed for US bankruptcy protection last week in the highest-profile crypto crash to date. Over a three-day period, traders pulled $6 billion from the platform.

Alongside this, rival exchange Binance abandoned a rescue deal after it noted concerns around FTS’s business practices and investigations by US financial regulators.

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Linked celebrities have moved to distance themselves from FTX. One of the exchange’s most prominent supporters, NFL star Tom Brady, has deleted several positive past tweets of the platform.

The Miami Heat basketball team, which was sponsored by FTX, has also announced it would be terminating its relationship with the crypto exchange, calling the news “extremely disappointing”.

FTX’s collapse and subsequent fallout has raised serious questions about the strength of regulation in the crypto space.

In a sign of the volatility of the digital currency, after the fallout from the FTX collapse, shares in crypto and blockchain firms dropped amidst fears of a potentially massive meltdown across the industry.

The US House of Representatives Financial Services Committee is now expecting to hear from Mr Bankman-Fried, who now faces potential civil and criminal charges.

Committee chairperson Maxine Waters said: “The fall of FTX has posed tremendous harm to over one million users, many of whom were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it all disappear within a matter of seconds.”

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