FTX Founder and Celebrity Backers Sued Amid Crypto Collapse Law Firms See Sector-Wide Profit Loss as Demand Falls Larry David, Tom Brady and Shaquille O'Neal are named among the defendants named in a class action lawsuit over the cryptocurrency platform's downfall. The global legal sector's profits have been hit by slowing demand and soaring operational costs, according to a worldwide sector snapshot by Thomson Reuters. 10.8% and 12.8% respectively. The report also noted that most law firms’ responses to the elevated costs has been to “wait it out” and continue with seasonal hiring. “With fresh memories of the difficulty of rehiring talent, law firms seem willing to accept some productivity contraction in the short term,” the report stated. FTX filed for Chapter 11 bankruptcy in the US on 11 November. BankmanFried resigned as CEO on the same day, following a week of turmoil regarded as the biggest collapse in the crypto sphere to date as the platform’s users rushed to withdraw more than $6 billion within 72 hours. Rival Binance abandoned a proposed rescue deal. Many of the company’s celebrity advocates have since sought to distance themselves from the brand, with Brady deleting a number of tweets tagging BankmanFried and the Miami Heat basketball team removing the FTX logo from the roof of its home court. a drop in transactional work compared to the previous year and an increase in lawyer salaries as a result of the escalating war for top talent. The report also noted that the costs of staff returning to physical offices post-pandemic will have compounded expenses. Firms’ direct expenses and overhead expenses grew by controlled, promoted, assisted in, [or] actively participated in FTX Trading” to encourage investment in the platform, which the suit refers to as a “Ponzi scheme”. Alleging that defendants stand to lose $11 billion from FTX’s collapse, the suit seeks unspecified monetary damages. The report showed that overall demand for legal services in Q3 this year was down 0.7% compared to the same period in 2021. Labour and employment was one of the few practice areas to see an uptick in demand, rising 0.3%, while M&A advice collapsed by 13.7%. Thomson Reuters attributed the loss of demand to both The complaint, which was filed on 15 November in Florida federal district court on behalf of FTX users, names these celebrities and others alongside founder and former CEO Sam BankmanFried. The lawsuit alleges that the defendants each “either MONTHLYROUND-UP 7
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