In recent reporting from the New York Times, the outlet covered the saga of NFL superstar Tom Brady’s involvement in the cryptocurrency exchange, FTX, and the ensuing fallout after its implosion. In the wake of the FTX bankruptcy, even NFL superstar Tom Brady has not been spared. He found himself embroiled in a crisis after the implosion of FTX, a leading cryptocurrency exchange to which he lent his name and invested in as an ambassador. The collapse of FTX, coupled with legal charges against its founder, Sam Bankman-Fried, has left the famous quarterback and other celebrity endorsers facing legal and financial fallout.
In the height of his ambassadorial role for FTX, Brady was a conspicuous promoter of the company. His face graced billboards, he starred in a Super Bowl commercial, and he appeared at FTX’s conference in the Bahamas, touting the company as the most reliable entity in the loosely regulated sphere of cryptocurrency.
The endorsement agreement Brady signed with FTX in 2021 saw him receive $30 million, almost entirely in FTX stock. His then-wife, supermodel Gisele Bündchen, was also given $18 million in FTX stock. Now that FTX is bankrupt and its founder, Bankman-Fried, is facing criminal fraud charges, Brady and Bündchen are dealing with lawsuits from disgruntled FTX customers seeking compensation.
The couple’s predicament has become a symbol of the reality check that celebrities, who were quick to jump on the crypto bandwagon during its boom period, are now facing. High-profile figures such as Paris Hilton, Snoop Dogg, Reese Witherspoon, and Matt Damon have all publicly endorsed or invested in crypto projects, helping to bring cryptocurrencies into the mainstream. However, the subsequent crypto crash has ended the celebrity-endorsed crypto era, leaving many in a financial lurch. However, it is crucial to underline that these issues resulted more from the actions of certain individuals involved with FTX, including its founder, Sam Bankman-Fried, and less from the nature of cryptocurrency itself.
This issue extends beyond Brady and Bündchen. In October, the SEC fined Kim Kardashian $1.26 million for inadequate disclosure when she endorsed the EthereumMax crypto token. In December, MoonPay and Yuga Labs were sued by a California lawyer who accused the two crypto companies of utilizing a “vast network of A-list musicians, athletes, and celebrity clients” to mislead investors. More recently, in May, a process server finally served court papers to retired NBA star Shaquille O’Neal for promoting FTX.
FTX was particularly aggressive in its pursuit of celebrity endorsements. As Bankman-Fried worked to make FTX a household name, he compiled a list of celebrities he imagined would be suitable for promoting the company. Brady’s name was at the top of this list, a decision that would later prove to be problematic. Moreover, the political landscape cannot be overlooked. Bankman-Fried was a significant donor to the Democratic Party. The millions he contributed to politicians adds another layer to the narrative, illustrating how intertwined the worlds of finance, politics, and crypto can become.
In June 2021, Brady and Bündchen signed an agreement with Bankman-Fried and publicly praised the “revolutionary FTX team.” Brady even co-founded Autograph, a company that helps celebrities sell nonfungible tokens (NFTs), and raised over $200 million from investors. Bankman-Fried joined the board of Autograph in the same year.
As part of their endorsement, Brady and Bündchen starred in a $20 million advertising campaign for FTX, with commercials running during NFL games. Brady also shared TikTok videos from FTX’s headquarters in the Bahamas and participated in a conference attended by hundreds.
However, the collapse of FTX last November wiped out the company’s $32 billion valuation, which included Brady and Bündchen’s $48 million worth of shares. The couple also lost a small amount of Ethereum, Bitcoin, and Solana tokens they received for trading on the platform. Brady has not publicly commented on the FTX situation or his relationship with Bankman-Fried since the company’s collapse.
This tale serves as a stern reminder of the volatile nature of the cryptocurrency market, the risks associated with celebrity endorsements, and the potential legal repercussions of promoting loosely regulated entities.
