- Many A-list stars still face major lawsuits after Sam Bankman-Freed was convicted on fraud charges
- A class-action lawsuit accuses stars including Tom Brady and Larry David of misleading investors by promoting their companies
Fallen “Crypto King” Sam Bankman-Fried’s empire is built on the success of Tom Brady, his ex-wife Gisele, comedian Larry David, NBA legend Stephen Curry and Set up with the help of Group A celebrity supporters such as tennis star Naomi Osaka, a class action lawsuit claims.
The financial fate of the celebrities remains to be seen following Thursday’s guilty verdict against Bankman-Fried in Manhattan federal court, as lawsuits filed by FTX investors who say they were misled by the celebrities remain pending. Texas.
During the trial, former FTX executive Nishad Singh testified that he felt the company spent too much on celebrity endorsements. It is understood that the exchange spent approximately $1 billion on marketing.
This frivolous behavior was arguably infuriated by the February 2022 Super Bowl ad spend on what became known as the Crypto Bowl, which infamously featured David paying a historical figure to do A series of wrong predictions were made, culminating in him saying he didn’t think FTX was a good investment.
Earlier this month, Singer testified about the company’s venture capital and planned $1.1 billion in marketing deals, including naming rights to the NBA’s Miami Heat home and ads featuring NFL quarterback Tom Brady. , “reeks of excess and gaudiness.”
In a separate lawsuit over FTX payouts, a shell company controlled by Bankman-Fried allegedly used $214 million of FTX funds to buy a stake in celebrity Kendall Jenner’s 818 tequila brand , and the tequila company’s assets were valued at only $2.94 million at the time.
Singer also said in his testimony that FTX had connections with many stars through investment firm K5, which Bankman-Fried described as a “one-stop shop” for building relationships with celebrities.
It was previously reported that FTX executives concocted a plot involving close celebrities to allow agents to take a stake in the company at a relatively low price.
The Financial Times reports that investors have a minimum floor, but agents can buy shares in the brand for fees as low as $25,000 and $50,000.
One former employee told the newspaper, “Sam gave people from large agencies a chance to come in as employees.”
Retired NFL star Brady and his supermodel ex-wife Gisele have been named FTX ambassadors, “joining the company’s $20 million 2021 ad campaign” and starring in a spot “showcasing what it means to be a part of FTX Introduced by acquaintances on the platform.”
Gisele told Vanity Fair: “I was blindsided. I’m no different than anyone else who believes the hype… It’s just… so horrible. I’m so sorry that this happened and I just pray that justice is served.”
The former Victoria’s Secret model also placed the blame on her financial advisors for making FTX sound like a “great thing.”
While working with FTX, Brady recorded TikTok with Bankman-Fried, and the two even co-hosted a presentation at a cryptocurrency conference called Winning.
“(Brady) really liked him and he really liked the hope that he brought,” writer Michael Lewis told “60 Minutes” in October. As time went on, he Instead of getting a really good explanation for what happened, I think (Brady) was like, ‘He cheated on me. I’m angry. I don’t want anything to do with it anymore’
The couple is believed to have lost a total of nearly $50 million on their investment in FTX.
Still, the former couple may still have to pay taxes on the investment.
Other celebrities who lost money include “Shark Tank” star Kevin O’Leary, who lost a total of $11 million on his investments on the exchange. In December 2022, he told CNBC’s Squak Box that he was paid $15 million to serve as a spokesperson for the company.
Tom Brady’s former boss, Patriots owner Robert Kraft, is estimated to have lost “eight figures” on his investments.
Golden State Warriors legend Curry was named in a class-action lawsuit after appearing in an ad campaign in which he said he didn’t need to be a cryptocurrency expert because “with FTX, I have what it takes to buy, sell and trade.” Everything is “safely encrypted”.
David appears in FTX’s Super Bowl commercial, which shows him portraying a series of ignorant characters as they reject historically smart ideas, including toilets and lightbulbs.
The ad then shows David rejecting FTX, followed by a message: “Don’t be like Larry.”
Shaquille O’Neal and Stephen Curry also appear in FTX commercials. Osaka is the company’s “ambassador.”
Taylor Swift is one of the celebrities who dodged the FTX bullet.
Attorney Adam Moskowitz, who is filing a class-action lawsuit against celebrities who support FTX, said in an interview in the spring that Swift withdrew from a $100 million tour sponsorship deal with FTX after questioning the cryptocurrency’s status as an unregistered security.
This prompted a flurry of headlines congratulating Swift on her escape from the financial troubles FTX found herself in, with many crediting her father’s career in finance with helping guide her through the decision-making process.
However, The New York Times reports in a new report that the “Bad Blood” singer did in fact sign a $100 million deal with Bankman-Fried, but Bankman-Fried Reed dropped out, leaving her and her team “frustrated and disappointed.”
Moskowitz told The Times this week that he was unaware of the intricate interactions between Swift and Bankman-Freed.
In an April podcast interview, Moskowitz said Swift backed out of any dealings with FTX because of questions raised about unregistered securities.
According to the Times, talks between Swift and FTX representatives lasted about six months, with the two camps discussing some promotional ideas before finalizing the idea of the company sponsoring her Eras tour, which is expected to be an all-time success. The first $1 tour since then grossed 100 million yuan.
Moskowitz made the remarks during an appearance on David Chaparro’s The Scoop podcast.
“I found out that Taylor Swift did just that. In our discovery, Taylor Swift actually asked them, ‘Can you tell me these are not unregistered securities? ” Moskowitz said in an interview about his lawsuit against FTX.
Twitter owner Elon Musk was among those who commented on the story. The South African tweeted: “Taylor is smart and her father is a respected investment banker.”
Bankman-Fried hit rock bottom Thursday when a New York jury convicted him of fraud that stole at least $10 billion from customers and investors.
After a month-long trial, a jury rejected Bankman-Fried’s assertion in testimony in Manhattan federal court that he had never implemented FTX before it went bankrupt a year ago. Fraudulent or intent to deceive customers.
‘gentlemen. Bankman-Fried. “Please stand up and face the jury,” Judge Lewis A. Kaplan said as the jury foreman pleaded guilty seven times to two counts of wire fraud, two counts of wire fraud conspiracy and three other conspiracy charges. The charges could carry potential penalties of up to 110 years in prison, the order said before a “guilty” response was made.
At sentencing on March 28, Bankman-Fried could face a sentence well below the maximum penalty.