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US DoJ Says FTX Advertisement Blur Lines between FTX.US and International Business

Summary:
The DoJ has said that advertisements for FTX did not differentiate between the US arm and the global business. According to the Department of Justice (DoJ), the FTX ads featuring American footballer Tom Brady and comedian Larry David show little distinction between the exchange’s US arm and its international business. According to a Friday filing, the DoJ said the celebrities in the ads describe FTX as an easy and safe way to use crypto, using a device showing the FTX logo and not FTX.US. The DoJ also said that several internal FTX documents indicate that the exchange made “no distinction” between advertising efforts for the international business and the US arm. The filing added: “The Super Bowl advertisement contains only one reference to FTX.US, not spoken but buried in the fine

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The DoJ has said that advertisements for FTX did not differentiate between the US arm and the global business.

According to the Department of Justice (DoJ), the FTX ads featuring American footballer Tom Brady and comedian Larry David show little distinction between the exchange’s US arm and its international business.

According to a Friday filing, the DoJ said the celebrities in the ads describe FTX as an easy and safe way to use crypto, using a device showing the FTX logo and not FTX.US. The DoJ also said that several internal FTX documents indicate that the exchange made “no distinction” between advertising efforts for the international business and the US arm. The filing added:

“The Super Bowl advertisement contains only one reference to FTX.US, not spoken but buried in the fine print on the closing frame of the commercial for approximately two seconds. When viewing that frame, the viewer’s eye is more likely to be drawn to the large FTX logo on the screen than to the reference to FTX.US that is barely legible in the notice at the bottom.”

Since the FTX collapse, US authorities have gone after FTX and its founder and former CEO, Sam Bankman-Fried (SBF). While he has pleaded not guilty to several charges, SBF has accused the DoJ of sneaking in additional allegations surrounding campaign finance and corruption. The former CEO has also argued about the kind of evidence the SEC can introduce to support wire fraud charges. On the other hand, the DoJ would prefer to pore over every detail of the company, arguing that the accusations are “inextricably intertwined” with the alleged customer funds misappropriation. The DoJ has also said that FTX co-founder Gary Wang was involved in acts that were “in furtherance of the charged wire fraud scheme”.

SBF has also argued that he was forced to give up control when FTX could still have recovered. However, the DoJ believes the bankruptcy and related events are important, where the company itself and its eventual financial health may not be. According to the DoJ, “whether customers could be made whole in the future ‘is immaterial as a matter of law.’”

Attorneys of the Former FTX CEO Accuse DoJ of Violating Extradition Terms

SBF’s attorneys have accused the US of sidestepping his extradition terms from the Bahamas where he lived and was extradited from. The DoJ eventually removed charges related to campaign finance and bribing Chinese officials because they were added after the initial extradition request.

The former FTX CEO’s lawyers are now claiming that the DoJ, by bringing evidence related to these charges, is trying to widen an otherwise narrow case using “severed and withdrawn counts”.

SBF’s lawyers have argued that jail conditions have made it very difficult for them to prepare with SBF for the trial coming up next month. Two weeks ago, Judge Lewis Kaplan of the United States District Court for the Southern District of New York allowed SBF to meet his lawyers for a maximum of 7 hours. However, the judge restricted the meeting to the cell block attorney at the courthouse from 8:30 AM until 3:00 PM EST. The ruling allowed SBF access to “one internet-enabled laptop and one WiFi device”. Nonetheless, SBF’s attorneys are still asking for a temporary release of five days a week to properly prepare for the trial.

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Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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