Taylor Swift’s tough FTX question may have cleared her of a lawsuit
Taylor Swift performs on stage during the “Taylor Swift | The Eras Tour” at Raymond James Stadium on April 14, 2023 in Tampa, Florida. Octavio Jones—TAS23/Getty Images for TAS Rights Management
Taylor Swift doesn’t just write hit songs, she also has an eye for due diligence.
When now-bankrupt crypto exchange FTX approached her about a $100 million sponsorship deal in 2021, the pop star asked them, “Can you tell me these aren’t unregistered securities,” according to the lawyer leading a class action lawsuit against FTX promoters.
That attorney, Adam Moskowitz, said in an interview on the podcast The Scoop that Swift was the only celebrity to question the exchange. Her father previously worked for Merrill Lynch.
Swift’s potential partnership with FTX could have included NFT tickets and would have been one of the crypto exchange’s biggest deals, though anonymous FTX employees said Financial Times last year: “Nobody really liked the deal. It was too expensive from the beginning.”
At the height of its popularity, FTX went on an ad spending spree that included partnerships with Major League Baseball, a Formula 1 team and an eSports team. It also paid off to stamp the name on the Miami Heat’s home arena.
Securities, which must be registered with the Securities and Exchange Commission, are governed by the Supreme Court’s Howey test, and they include investment contracts, the definition of which includes “when there is an investment of money in a joint enterprise with a reasonable expectation of profit to be derived from the efforts of others. “
The SEC alleged in a complaint in December that FTX’s original token, FTT, was a security. In the class-action lawsuit filed in November, Moskowitz accused celebrities such as Tom Brady, Gisele Bundchen, Steph Curry, Shaquille O’Neil, MLB’s David Ortiz and Shohei Ohtani and the Golden State Warriors of violating Florida’s securities and consumer protection laws—and engaging in an unlawful civil conspiracy. Moskowitz, along with skilled attorney David Boies, is trying to recover compensation for those who lost money investing with FTX.
FTX declared bankruptcy last year after a liquidity crisis led to a crisis for the company. The company’s former CEO and founder, Sam Bankman-Fried, was charged with eight counts, including wire fraud, for allegedly mishandling customer funds. In February, a new indictment was handed down against the disgraced crypto-founder along with two unnamed co-conspirators.
