The Mercedes-AMG Petronas F1 Team and Major League Baseball (MLB) have been accused, in a new lawsuit filed by a group of FTX users, of being complicit in fraudulent activities conducted by FTX through their promotional agreements with the crypto exchange.
On November 27, the plaintiffs initiated twin class-action lawsuits in a Florida district court, alleging that these companies were involved in “aiding and abetting and/or actively participating in the FTX Group’s massive, multibillion-dollar global fraud” and endorsing unregistered securities.
During 2021, Mercedes F1 entered into a promotional agreement with FTX, resulting in the placement of FTX’s logo on cars, uniforms, hats, and other merchandise. Similarly, the MLB also signed a comparable deal, making it the first professional sports league to do so. As part of this collaboration, umpires displayed FTX’s logo on their uniforms.
In the class complaint filing, it was emphasized that the key and most significant aspect of this partnership was the inclusion of FTX.US patches on all MLB umpire uniforms. This marked the first instance in the long history of MLB, which dates back to the 1800s, where a sponsor brand’s logo appeared on umpire uniforms.
The complaint lodged against Mercedes F1 echoed similar concerns, asserting that the team prominently displayed FTX’s logo on its cars, merchandise, and marketing materials.
Furthermore, the lawsuit highlighted that FTX consistently expressed support and offered congratulations to Mercedes F1 and its drivers, thereby creating an illusion of trustworthiness among fans of the team.
The complaint further stated that the effectiveness of this tactic would have been significantly diminished had it not been for Mercedes F1’s simultaneous endorsement and promotion of FTX.
The group of FTX users involved in the lawsuit has also filed legal action against a number of celebrities who endorsed the exchange, including former sports figures such as Shaquille O’Neal and Tom Brady. These lawsuits allege similar claims of promoting unregistered securities.
Many of the celebrities named in the lawsuits have sought to have the charges against them dismissed, arguing that they did not encourage individuals to deposit money into FTX. However, at least three individuals, namely professional American football player Trevor Lawrence and YouTubers Kevin Paffrath and Tom Nash, have chosen to settle the cases brought against them.
In November, FTX founder and former CEO Sam Bankman-Fried was found guilty on seven counts related to fraud, conspiracy, and money laundering.
Approximately one year after the agreement was signed, the MLB terminated its five-year promotional contract with FTX shortly after the company filed for bankruptcy in November 2022.
Similarly, Mercedes F1 terminated its agreement with FTX that same year and removed the exchange’s logo from its cars and merchandise.