Taylor Swift avoided $100 million FTX debacle by questioning whether the exchange was selling unregistered securities

According to the attorney bringing a class action lawsuit against FTX promoters, when the now-bankrupt cryptocurrency exchange FTX contacted her about a $100 million sponsorship agreement in 2021, the pop singer reportedly questioned them, “Can you convince me that these are not unregistered securities?

Swift was the only famous person to raise concerns about the interaction, according to that lawyer, Adam Moskowitz, in an interview with the podcast The Scoop. Her father was once employed at Merrill Lynch.

Although an unidentified FTX employee told the Financial Times last year that “No one really liked the deal,” Swift’s possible relationship with FTX may have featured NFT tickets and would have been one of the crypto exchange’s largest agreements. It was overpriced from the start.

FTX engaged in relationships with Major League Baseball, a Formula 1 team, and an e-sports team during the height of its advertising expenditure binge. Additionally, it paid to have its name inscribed on the Miami Heat’s home arena.

The Supreme Court’s Howey Test governs securities, which are required to be registered with the Securities and Exchange Commission. Securities include investment contracts, which are defined as “when there is the investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.”

In a lawsuit filed in December, the SEC claimed that FTT, the native token of FTX, was a security. Celebrities like Tom Brady, Gisele Bündchen, Steph Curry, Shaquille O’Neill, David Ortiz, Shohei Ohtani, and the Golden State Warriors were charged with breaking Florida securities and consumer protection laws as well as participating in an illegal civil conspiracy in the class action lawsuit Moskowitz filed in November. Moskowitz is attempting to collect damages for customers who lost money investing with FTX with the help of renowned attorney David Boies.

After experiencing difficulty due to a lack of funding, FTX filed for bankruptcy last year. Sam Bankman-Fried, a former CEO and founder, was accused of mismanaging client cash and was charged with eight charges, including wire fraud. A new charge was issued in February against the discredited creator of a cryptocurrency along with two unidentified accomplices.

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