Even as the crypto market returns to form, celebrities are still feeling the sting of manifold industry disasters and frauds last year that they unwittingly helped promote.
Take Tom Brady: after signing an endorsement deal with fallen crypto exchange FTX in June 2021, the seven-time Super Bowl-winning quarterback now faces charges from FTX investors claiming to have been “misled” by such ambassadors. Many other prominent are names included in the suit, like Larry David, David Ortiz, and the Golden State Warriors.
FTX’s implosion in late 2022 left customers $8.7 billion in the hole, the company’s bankruptcy team confirmed last week.
Representatives like Brady were also harmed, however, as the $30 million he received to promote the exchange is now virtually worthless. What’s worse, the terms of the deal may require him to pay taxes on some of that stock, according to people familiar with the deal.
Sina Nader, FTX’s former Head of Partnerships, told the New York Times that he was responsible for recruiting celebrities, athletes, and the like to partner with the exchange. He recalled a list of superstars created by his disgraced boss, Sam Bankman-Fried, who he envisioned representing the company, of which Brady’s name was at the top.
Since last year, Tom Brady suffered with his own crypto venture called Autograph, which raised $200 million to help celebrities sell their NFTs to fans. Faced with tanking revenue in 2022, the person familiar with the company’s finances said shifted strategies to helping foster celebrity loyalty in general, rather than focus on NFTs.
How Do Other Celebrities Fare?
Shark Tank Star Kevin O’Leary was also paid $15 million to promote FTX less than 2 months after Brady. Like the former, he had part of his compensation paid out in cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Solana (SOL), all of which have since been lost in the exchange.
Basketball legend Shaquille O’Neal managed to escape prosecutors in the lawsuit against Brady and other celebrities for months, but was finally served legal papers outside his house in April.
In May, he was served another set of legal papers during his attendance at an NBA playoff game for his founding and promotion of a Solana-based NFT project called Astrals, which the lawsuit said involved “unregistered securities.”
The U.S. Securities and Exchange Commission (SEC) forced Kim Kardashian to pay a $1.26 million for not disclosing her promotion of the crypto token EthereumMax last year. In March, the SEC targeted other stars like Lindsay Lohan and Jake Paul with similar charges.
Certain congresspeople have been critical of the SEC for their “selective” enforcement actions against celebrity figures, and not more harmful actors in the crypto space.
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