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FTX Influencers in Trouble While Advisors Pocket $103M in Q1

FTX Influencers in Trouble While Advisors Pocket $103M in Q1

A group of personal finance influencers on YouTube, who are experts in the field, are being pursued by victims who lost their money due to FTX's downfall.

One of these influencers, Tom Nash, received a lawsuit notice via Twitter after the Moskowitz Law Firm was granted permission for the case by a Florida district court judge.

Lawsuit Served on Twitter

Nash, who resides in Sydney, is among the ten defendants named in the class-action lawsuit, which states that these influencers played a significant role in the FTX scandal. The lawsuit also claims that FTX wouldn't have achieved such heights without their support and hype. Despite being handsomely paid in return, these influencers failed to disclose their compensation.

Nash was the only one among the defendants who did not respond. Others named include Kevin Paffrath, Graham Stephan, Andrei Jikh, and Jaspreet Singh.

Furthermore, Ben Armstrong (aka BitBoy Crypto), a YouTuber and Crypto Twitter personality named in the lawsuit, missed an appearance ordered by a federal magistrate judge last month. He even mocked the federal judge's authority by tweeting photos of himself on a beach on the same day he was scheduled to appear in court.

The lead attorney representing the plaintiffs, Moskowitz, claimed that Armstrong harassed the legal team with endless phone calls, tweets, and emails, voicemails full of vulgarities, and social media posts suggesting threats. The judge later banned Armstrong from tweeting about Moskowitz and the plaintiffs in the case.

Advisors Earning Millions

FTX collapsed over a period of ten days last November, with its disgraced CEO Sam Bankman-Fried under house arrest before a trial in October. The former executive is accused of masterminding a years-long fraud by using billions of dollars of FTX customer funds for personal expenses and high-risk bets through the exchange's sister trading house, Alameda Research.

Victims have lost millions of dollars, but the advisors overseeing the ruins of the FTX Group will reportedly earn $103 million over the first quarter.

Five firms, Sullivan & Cromwell, Alvarez & Marshal, AlixPartners, Quinn Emmanuel Urquhart & Sullivan, and Landis Rath & Cobb, billed FTX a total of $36.4 million in March alone. However, the paychecks for these five law firms for January and February stood at $34.2 million and $32.5 million respectively.

Sullivan & Cromwell, based in New York, charged the largest invoice of $14.1 million in fees and expenses for March, taking its total to $44.4 million for Q1.