As the FTX cryptocurrency exchange imploded last fall, tom bradyThe seven-time Super Bowl winning quarterback made an urgent phone call.
He called Sina Nadar, head of partnerships at FTX. The exchange’s staff were in the midst of a crisis meeting with its embattled founder, Sam Bankman-Fried, Mr. Nader could not answer. “I never expected Tom Brady to decline the call,” he said.
Mr. Brady had reasons to be concerned. As an “ambassador” for FTX, he appeared at the company’s convention and TV shows in the Bahamas. advertisements that promoted the exchange “most reliable” institution in the loosely regulated world of crypto.
His money was also at stake. as part of a Approval The deal that Mr. Brady signed in 2021 saw FTX paying him $30 million, three people with knowledge of the contract said, a deal that consisted almost entirely of FTX stock. Mr. Brady’s wife at the time, supermodel Gisele Bündchen, was paid $18 million in FTX stock, one of the people said.
Now ftx is bankrupt, and Mr. Bankman-Fried is facing criminal fraud charges. Mr. Brady, 45, and Ms. Bündchen, 42, have been sued by a group of FTX clients seeking damages from the celebrities who endorse the exchange. In addition to all this, the terms of the deal would require the former couple to divorced Last year, he would have to pay taxes on at least some of his now-defunct FTX stock, said two people familiar with the endorsement deal.
His position is one of the starkest examples of the humiliation faced by actors, athletes and other celebrities who have rushed to adopt cryptocurrencies for easy money and online promotion. during boom times, Paris Hilton, Snoop Dogg, Reese Witherspoon and Matt Damon All have owned or invested in crypto projects, bringing mainstream audiences into the strange world of digital currencies. It was fun and profitable – while prices soared.
But last year’s accident Celebrity Crypto Bonus Expired.
In October, the Securities and Exchange Commission ordered Kim Kardashian will have to pay $1.26 million for failing to make adequate disclosures when endorsing the Ethereum Max crypto token. In December, a California attorney sued two crypto companies, Moonpay and Yuga Labs, accusing them of using a “vast network of A-list musicians, athletes and celebrity clients” to mislead investors about digital assets. accused of using.
In March, the S.E.C. Was accused Actress Lindsay Lohan, online influencer Jake Paul and musicians including Soulja Boy and Lil Yachty are promoting crypto assets illegally. and in late May, after months of unsuccessful attempts, a process server served court papers According to legal filings, retired basketball star Shaquille O’Neal was sued for promoting FTX. Mr. O’Neal was served during the broadcast of a National Basketball Association playoff game.
Representatives for Mr. Brady, Mr. Bankman-Fried and Moonpay declined to comment. A spokesperson for Yuga Labs said that the company has “never paid any celebrity to join the club.” Representatives for Ms. Bündchen and Mr. O’Neill did not respond to requests for comment.
Tech start-ups and celebrities have long had a symbiotic relationship. Start-ups offer stars a way to make money while staying on the cutting edge of Internet culture; Celebrities help young companies gain credibility and reach a larger audience.
Of all the start-ups recruiting celebrities to endorse crypto, FTX was perhaps the most curious. As Mr. Bankman-Fried tried to turn FTX into a household name, he made a list of celebrities he could imagine promoting the company, recalled Mr. Nadar, a former FTX executive. Mr. Brady’s name was at the top.
Mr. Nader, a former college football player, was in charge of recruiting Mr. Brady and other stars. In June 2021, Mr. Brady and Ms. Bündchen agreed a deal With Mr. Bankman-Fried praising the “revolutionary FTX team”. Mr. Brady was really interested in crypto, Mr. Nader said, and occasionally chatted with Mr. Bankman-Fried.
“Imagine a tiger and a lion talking,” Mr. Nader said. “They’re a little different, they do different things, but they’re really formidable in their field.”
In 2021, Mr. Brady also co-founded Autograph, which helps celebrities sell crypto collectibles known as non-fungible tokens, or NFTs. Autograph raised over $200 million from investors and Mr. Bankman-Fried joined the board.
In the same year, Mr. Brady and Ms. Bündchen starred in a $20 million advertising campaign for FTX, with commercials running during NFL games. Mr. Brady also posted tiktok video With Mr. Bankman-Fried from FTX’s headquarters in the Bahamas, where he spoke at a conference in front of hundreds of people. Backstage, Mr. Bankman-Fried commented that he might envision someday buying a football team with Mr. Brady. Ms. Bündchen also attended the conference as FTX’s head of environmental and social initiatives.
When FTX collapsed last November, the company’s $32 billion valuation — which included Mr. Brady and Ms. Bündchen’s $48 million shares — plummeted to zero. The couple also received small amounts of ethereum, bitcoin and Solana tokens for trading on the platform, which disappeared in the FTX bankruptcy, one of the people said.
Mr. Brady has not commented publicly on his relationship with FTX or Mr. Bankman-Fried. After a crisis meeting of the FTX in November, Mr. Nader called him back.
“He was concerned,” Mr. Nader said. “The first thing he asked me was: ‘Sina, how are you? I know you have put your heart and soul into it.
Ms. Bündchen said in a March Interview with Vanity Fair that she “relied on the hype” and felt “indiscriminate”.
Mr. Brady’s other crypto venture has also struggled. Autograph’s revenue sank last year amid the crypto downturn, said a person familiar with its finances. The start-up has changed its strategy to focus more on helping celebrities find ways to increase loyalty with their fans and less on marketing crypto tokens to consumers, the person said. Another person with knowledge of the company said the company has also dropped some crypto language from its marketing, downplaying terms like NFTs.
A third person said Autograph has also laid off more than 50 employees. cut was reported earlier insider, An Autograph spokeswoman declined to comment.
Mr. Brady has also faced legal trouble. In December, Adam Moskowitz and law firm Boes Schiller Flexner filed a lawsuit in Florida federal court accusing him and Ms. Bündchen of misleading investors. Other defendants include comedian Larry David, NBA star Steph Curry and tennis player Naomi Osaka, all of whom supported FTX.
“None of these defendants conducted any due diligence prior to marketing these FTX products to the public,” the lawsuit states.
Some celebrities narrowly escaped the crypto mess. Pop star Katy Perry had talks with FTX about a partnership that never materialized, three people familiar with the situation say. have said,
Last spring, Taylor Swift discussed a deal with FTX that could have paid up to $100 million, two people familiar with the matter said. A person with knowledge of the talks said a tour sponsorship was in the works after Ms Swift rejected other promotional options. The deal size was first reported by The financial Times,
Mr. Moskowitz, a celebrity litigator, said on a podcast In April Ms. Swift conducted due diligence on FTX, asking the exchange to prove that her cryptocurrencies were not unregistered securities. his comments led to a flurry of headlines About Ms. Swift’s business acumen. But in an interview with The New York Times, Mr. Moskowitz said he had no inside information about the talks.
In fact, Ms Swift’s side signed the sponsorship deal with FTX after more than six months of discussions, three people with knowledge of the deal said, and it was Mr Bankman-Fried who withdrew his name. Two people said the last-minute reversal left Ms Swift’s team frustrated and disappointed.
A spokesman for Ms Swift declined to comment.