Crypto firm touted by David Beckham as ‘scammed investors’

David Beckham is promoting a tech company embroiled in a dispute over allegations that its bosses defrauded investors to fund lavish properties, luxury vacations and sponsorship deals.

The former England captain announced his new role as ‘global brand ambassador’ for DigitalBits last month in a promotional video which saw him kick a football into the ‘metaverse’.

The digital currency company has already struck deals worth over £100m 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.

Own goal: Former England captain David Beckham in an ad for DigitalBits

But the Mail on Sunday can reveal that DigitalBits bosses are accused of diverting money from developing its technology to fund luxury travel and sports deals.

A lawsuit filed in New York claims DigitalBits investor Mark Dorrell was “personally defrauded of at least $160 million.” [£122.5million] …by its founders, who kept its money and tokens and used them to unjustly enrich themselves and their friends”.

The lawsuit adds: ‘These acts enabled the perpetrators to live extravagant and lavish lifestyles by traveling the world, living and working between New York and Palm Beach, Florida, Rome and Dubai, and by buying vacation homes in the Cayman Islands.

“Despite their extravagance, the funds they wrongfully raised were enough to pull off massive promotional projects, like one of their companies signing a $36 million deal… as the title sponsor of the Italian football team, AS Roma.”

There is no indication that Beckham or other celebrity ambassadors have knowledge of any 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 a shareholder of Authentic Brands. But it has seen investments in UK listed companies take a sharp sell-off (see below).

Last weekend, he attended his son Brooklyn’s lavish wedding 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.

Star quality: David Beckham with his wife Victoria

Star quality: David Beckham with his wife Victoria

The lawsuit alleges that the sponsorships were designed simply to increase the price of the DigitalBits cryptocurrency, when the technology does not exist as claimed by the company. The lawsuit was filed against DigitalBits founder Al Burgio, a serial entrepreneur who is now chief executive of fintech company Zytara. The lawsuit was also filed against the DigitalBits foundation, Zytara, consulting firm GDA Capital and its co-founder Michael Gord.

The price of the cryptocurrency has fallen sharply against the dollar over the past month. Adam Ford, attorney at Ford O’Brien, which represents the investors, said: ‘I am surprised that Mr Beckham has announced his involvement in a project which still hides his alleged software from public view. My clients believe that any compensation he has received is rightfully theirs and we are working out how to recover it.

It is understood that five other investors and former employees are set 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 prided myself on working with the best teams and am so excited to be working on my NFT collections and other innovations in the future.”

DigitalBits director Daniele Mensi said, “The DigitalBits Foundation has not conducted any business with the plaintiff making the allegations.”

He added: ‘The foundation plans to vigorously defend the lawsuit’ and said it was confident the claims would ultimately be found to be without merit.

A spokesperson for David Beckham declined to comment.

…and two of his stock bets collapse

David Beckham may have become the first footballer to create a personal global brand, but he scored an own goal in the stock market.

Two investments in London-listed companies suffered a painful sell-off despite occupying fast-growing markets.

Beckham was a founding investor in Guild Esports in 2019, which continued to float a year later.

The company has moved from issue to issue, including recently revealing that a multi-million pound sponsorship deal with a European fintech company has not materialized. Its shares were listed in October 2020 at 8.15p and have since fallen 78% to 1.8p yesterday. Beckham holds a 4.7% stake in the company.

Cannabis oil company Cellular Goods was also a flop, despite a promising start.

It floated at 5p in London in February last year and the share price soared to 19p on its debut, but has since fallen 85% to 2.75p.

The company – in which Beckham has a 5% stake – manufactures cannabidiol (CBD) capsules, drops and sprays for up to £49 a pack, but has had ongoing problems being able to advertise online.

Last week it was also forced to admit that its CBD products may have to be pulled from store shelves, following discussions with the Food Standards Agency.

The stock market kicks are unlikely to create a big dent in the overall fortunes of Beckham and his wife Victoria, each estimated at £350million. Their wealth comes from a range of businesses and sponsorship deals ranging from fashion to toiletries.

Marc Shapland

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