When cryptocurrency exchange FTX collapsed last fall, seven-time Super Bowl champion quarterback Tom Brady made an emergency call.
He called Sina Nader, head of partnerships at FTX. The exchange’s staff were in the middle of a crisis meeting with beleaguered founder Sam Bankman-Fried. Mr. Nader could not answer. “I never thought I would turn down a call from Tom Brady,” he said.
Mr. Brady had reason to be concerned. As an “ambassador” for FTX, he appeared at the company’s conferences in the Bahamas and on television. commercial facilitated the exchange as “Most Reliable” institutions in the loosely regulated cryptocurrency world.
His money was also at risk.as part of approval In a deal Brady signed in 2021, FTX paid him $30 million, which consisted almost entirely of FTX stock, three people familiar with the deal said. Brady’s wife, supermodel Gisele Bündchen, was paid $18 million in FTX stock at the time, one of the people said.
FTX is now bankrupt and Bankman-Fried is facing criminal charges of fraud. Brady, 45, and Bundchen, 42, are being sued by an FTX customer group seeking compensation from celebrities who supported the exchange. In addition, the terms of the deal would require the former couple, who divorced last year, to pay taxes on at least some of their now-worthless FTX shares, two people familiar with the endorsement deal said.
Their situation is the most high-profile example of the humiliating judgment faced by actors, athletes and other celebrities who rushed to embrace crypto easy money and online hype. In the boom era, Paris Hilton, Snoop Dogg, Reese Witherspoon, and Matt Damon all enthused or invested in cryptocurrency projects, immersing mainstream audiences in the volatile world of digital currencies. pulled into. While the prices have skyrocketed, it’s been fun and lucrative.
But last year’s crash put an end to celebrity crypto millionaires.
In October, the Securities and Exchange Commission ordered Kim Kardashian to pay $1.26 million for failing to make proper disclosures when supporting the Ethereum Max crypto token. In December, a California attorney sued two virtual firms, MoonPay and Yuga Labs, for using “a vast network of A-list musicians, athletes, and celebrity clients” to mislead investors about digital assets. sued the currency company.
In March, the SEC indicted actress Lindsay Lohan, online influencer Jake Paul, and musicians including Soulja Boy and Lil Yachty for illegally promoting cryptocurrencies.Then, after months of unsuccessful attempts, he announced in late May that the process server was delivered court papers It was presented to former basketball star Shaquille O’Neal, who was sued for promoting FTX, according to legal filings. O’Neill was served during a broadcast of a National Basketball Association playoff game.
Representatives for Brady, Bankman-Fried and Moonpay declined to comment. A Yuga Labs spokeswoman said the company “never paid celebrities to join the club.” Representatives for Bundchen and O’Neill did not respond to requests for comment.
Tech startups and celebrities have long had a symbiotic relationship. Startups offer stars a way to make money while staying on the cutting edge of internet culture. Celebrities help young companies gain credibility and reach wider audiences.
Of all the startups that have hired celebrities to endorse cryptocurrencies, FTX was probably the most enthusiastic. Nader, a former FTX executive, recalls that Bankman-Fried created a list of celebrities who would envision promoting the company in an attempt to make FTX a household name. Brady’s name was at the top.
Nader, a former college football player, was in charge of scouting for Brady and other stars. Brady and Bundchen June 2021 agreed to the transaction He praised the “revolutionary FTX team” along with Bankman-Fried. According to Nader, Brady seemed genuinely interested in cryptocurrencies and had occasional conversations with Bankman-Fried.
“Imagine a tiger and a lion talking,” says Nader. “They’re a little different, they do different things, but they’re really formidable in their respective fields.”
In 2021, Brady also co-founded Autograph, a company that helps celebrities sell crypto collectibles known as non-fungible tokens (NFTs). Autograph has raised more than $200 million from investors and Bankman-Fried has joined its board of directors.
In the same year, Mr. Brady and Mr. Bündchen starred FTX’s $20 million advertising campaign featured commercials during NFL games.Mr. Brady also posted TikTok video I met Bankman-Fried from FTX headquarters in the Bahamas, who spoke at the conference in front of hundreds of people. Backstage, Bankman-Fried said he could imagine one day buying a football team with Brady. Ms. Bündchen was also present at the conference as FTX’s Environmental and Social Initiatives Director.
When FTX collapsed last November, the company’s $32 billion valuation, which included Brady and Bundchen’s $48 million stake, plummeted to zero. The couple also received a small amount of Ethereum, Bitcoin and Solana tokens to trade on the platform, but those disappeared with FTX’s bankruptcy, according to one of the people involved.
Brady has not publicly commented on his relationship with FTX or Bankman-Fried. Nader called him back after FTX’s crisis conference in November.
“He was worried,” Nader said. “The first thing he asked me was, ‘Sheena, how are you doing?’ I know you put your heart and soul into this.”
Bündchen said in an article in March. interview Vanity Fair said she “believes the hype” and “feels blind”.
Brady’s other crypto ventures have also struggled. Autograph’s revenue fell last year amid the cryptocurrency meltdown, according to people familiar with Autograph’s finances. The startup has changed its strategy to focus on helping celebrities find ways to foster loyalty with their fans, rather than marketing crypto tokens to consumers, the people said. Another person familiar with the company said the company has removed some crypto terms from its marketing and downplayed terms like NFT.
Autograph has cut more than 50 employees through layoffs, according to a third party.A reduction was previously reported insider. A spokeswoman for Autograph declined to comment.
Brady is also facing legal troubles. In December, Adam Moskowitz and law firm Boyes-Shiller-Flexner filed a lawsuit in federal court in Florida, accusing him and Mr. Bundchen of misleading investors. Other defendants included comedian Larry David, NBA star Stephen Curry and tennis player Naomi Osaka, all of whom backed FTX.
“None of these defendants performed any due diligence prior to selling these FTX products to the public,” the lawsuit states.
Some celebrities have barely escaped the cryptocurrency turmoil. Pop star Katy Perry discussed a partnership with FTX, but it never materialized, according to three people familiar with the matter.
Last spring, Taylor Swift discussed a deal with FTX that could pay up to $100 million, according to two people familiar with the matter. A person familiar with the talks said sponsorship of the tour was being considered after Ms. Swift turned down other promotional options.The size of the deal was previously reported by He financial times.
Moskowitz, a lawyer who has sued celebrities, said: said on the podcast In April, it was revealed that Swift had asked the exchange to conduct due diligence on FTX and prove that the cryptocurrency was not an unregistered security.his comment made a series of headlines About Ms. Swift’s business acumen. But Moskowitz said in an interview with The New York Times that he had no inside information about the meeting.
Swift actually signed the sponsorship deal with FTX after more than six months of negotiations, according to three people familiar with the deal, and it was Bankman-Fried who pulled out. The last-minute turnaround left Swift’s team frustrated and disappointed, two people said.
A spokeswoman for Ms Swift declined to comment.