Crypto firm touted by David Beckham ‘fleeced investors’
As ex-footballer nets a fortune to star in adverts, DigitalBits faces court fight
DAVID Beckham is promoting a technology company embroiled in a dispute over claims that its bosses fleeced investors to fund lavish properties, luxury holidays and sponsorship deals.
The former England captain announced his new role as ‘global brand ambassador’ for DigitalBits last month in a promotional video that saw him kicking a football in the ‘metaverse’.
The digital-currency firm already has deals worth more than £100 million with Italian football clubs Inter Milan and Roma, as well as sports stars including former boxer Floyd Mayweather. Insiders say Beckham’s deal could be worth £5million a year.
But the Mail on Sunday can reveal DigitalBits bosses are facing allegations that they diverted money from developing its technology to fund luxury travel and sports deals. A lawsuit filed in New York claims that a DigitalBits investor, Mark Dorrell, was ‘personally defrauded out of at least $160 million [£122.5million] ... by its founders, who kept his cash and tokens and used them to unjustly enrich themselves and their friends’.
The lawsuit adds: ‘These acts have allowed the perpetrators to live extravagant, lavish lifestyles travelling around the world, living and working between New York City and Palm Beach, Florida, Rome and Dubai, and purchasing vacation homes in the Cayman Islands.
‘Notwithstanding their extravagance, the funds they have wrongfully garnered have been sufficient to do massive promotional projects, such as having one of their companies enter into a $36million contract ... as the main sponsor of Italian soccer team, AS Roma.’
There is no suggestion that Beckham or any other celebrity ambassadors have any knowledge of alleged wrongdoing.
Beckham’s finances have been in the spotlight since he sold a majority stake in his brand management company DB Ventures to Authentic Brands earlier this year, becoming an Authentic Brands shareholder in the process. But he has seen investments in UK stock market-listed ventures suffer a punishing sell-off (see below).
Last weekend he attended the lavish wedding of his son Brooklyn to Nicola Peltz, daughter of billionaire activist investor Nelson Peltz.
DigitalBits makes technology that allows people to trade cryptocurrencies or digital artwork known as NFTs, or non-fungible tokens. The lawsuit alleges sponsorships have been designed simply to raise the price of the DigitalBits cryptocurrency, while the technology does not exist as the company claims.
The lawsuit has been brought against DigitalBits founder Al Burgio, a serial entrepreneur who is now chief executive of financial technology firm Zytara. The claim has also been brought against the DigitalBits Foundation, Zytara, the advisory firm GDA Capital and its co-founder Michael Gord.
The price of the cryptocurrency has slumped sharply against the dollar over the past month. Adam Ford, a lawyer at Ford O’Brien, which is representing the investors, said: ‘I am surprised Mr Beckham announced his involvement in a project that is still hiding its purported software from public view. My clients believe that any compensation he received is rightfully theirs and we are looking into how to recover it.’ It is understood that a further five investors and former employees are poised to sue DigitalBits for a total of $110 million. Full legal complaints are due this week. Announcing his role with the company, Beckham said: ‘I have always taken pride in working with the best teams and I am so excited to work on my NFT collections and more innovations in the future.’ DigitalBits director Daniele Mensi said: ‘The DigitalBits Foundation has conducted no business with the plaintiff making the allegations.’
He added: ‘The foundation plans to defend the lawsuit vigorously’ and said it is confident that the claims will ultimately be found to be without merit.
A spokesman for David Beckham declined to comment.
‘Bosses diverted money to fund luxury travel’