Taylor Swift Takes a Stand Against Shady Crypto Bids, Walks Away $100M

[ad_1]

A recent report from Business Insider revealed that Taylor Swift has pulled out of a $100 million sponsorship deal with Sam Bankman-Fried and his crypto exchange, FTX. The popular singer was the only celebrity to question the crypto exchange’s compliance with regulations regarding unregistered securities.

The information was disclosed by Adam Moskowitz, the attorney handling a class action lawsuit against several FTX promoters, including Shaquille O’Neal, Tom Brady and Larry David. Moskowitz revealed that the plaintiffs were seeking more than $5 billion from celebrities endorsing FTX.

FTX crypto debacle continues to reverberate

The lawsuit against FTX executives, filed by the Securities and Exchange Commission (SEC) in December 2022, alleged that FTX’s cryptocurrency, FTT, was sold as an investment contract and was not registered for appropriate manner as a security with the SEC. The lawsuit filed by Moskowitz seeks damages for clients who lost money investing in FTX.

However, while several celebrities have endorsed FTX, Moskowitz revealed that Taylor Swift was the only celebrity to question the crypto exchange’s compliance with regulations regarding unregistered securities. Moskowitz praised Swift for her diligence in reviewing the proposed sponsorship deal and for refusing to compromise on the issue of unregistered titles.

According to the report, the plaintiffs claim that celebrities endorsing FTX misled people by promoting the exchange without disclosing the significant risks associated with investing in the crypto market. This includes that FTX was not registered with the Securities and Exchange Commission (SEC) and allegedly failed to comply with regulations regarding unregistered securities.

The terms of the proposed deal included selling tickets as non-fungible tokens (NFTs), a move considered risky by FTX’s marketing staff, who believed the deal was too expensive from the start.

Additionally, Moskowitz added that upon discovery, Swift asked FTX to confirm that the securities offered were not unregistered, demonstrating its understanding of the risks associated with investing in the crypto market.

SEC Chairman Blames Crypto Bank Failures

Gary Gensler, Chairman of the Securities and Exchange Commission, recently made headlines when he spoke to Congress about the failures of three banks: Silvergate Bank, Silicon Valley Bank and Signature Bank. Gensler suggested that the bank’s involvement in the crypto industry may have contributed to their failures during his testimony.

For this, Minnesota Congressman Tom Emmer criticized Gary Gensler for his “regulation by enforcement” approach to digital assets. At a House Financial Services Committee hearing, Emmer accused Gensler of failing to protect investors while pushing valuable financial innovation overseas.

Additionally, attorney John Deaton also sparked a debate over the classification of tokens as securities in a recent tweet. Deaton argued that the SEC Chairman asserting that a token is always a security is an unconstitutional shorthand that avoids the need to perform a Howey analysis and that WJ Howey himself would never support such a claim.

The Howey test, established by the Supreme Court in 1946, determines whether a contract or an investment asset is a security. The test defines an investment contract as a contract, transaction, or scheme in which a person invests money in a common enterprise and is made to expect profits solely from the efforts of others.

The debate around the classification of tokens as securities has been going on for years and has significant implications for the crypto industry.

However, it is crucial to recognize that the industry and its various applications offer another solution to the financial crisis the world is experiencing. In this sense, digital assets can be seen as a financial haven for investors who can rely on them to protect their savings.

BTC decline on the 1-day chart. Source: BTCUSDT on TradingView.com

Featured image from Unsplash, chart from TradingView.com

[ad_2]