Tom Brady, Stephen Curry, Larry David among celebrities being probed by Texas over their affiliation with defunct crypto-giant FTX
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Tom Brady and Stephen Curry are few of the prominent athletes who continue to suffer the consquences of their association with FTX and Sam Bankman-Fried.
The aftermath of the FTX collapse continues to roll heads. The celebrities who endorsed the now-struggling crypto exchange are facing the heat over their affiliation with the company and former CEO Sam Bankman-Fried. Top names such as Tom Brady, Steph Curry, and Larry David are being looked into by Texas State regulators.
As per Joe Rotunda, the Director of Enforcement at the Texas State Securities Board, the agency is looking into the payments made to the top athletes who were the face of the company. Their advertisements and association with the exchange made the people trust FTX and invest their money in it.
In an interview with Bloomberg News, Rotunda stated that the agency is now looking into the extent of the involvement of these celebrities and to what extent they disclosed their financial stakes in FTX. They are also looking into how much of this information was made available to the public at large.
“We are taking a close look at them,” he stated while adding that the celebrity endorsements of FTX are not the primary focus of the investigation. It is just one of many angles from which the authorities are looking into it. FTX is also being looked into and Texas officials are working with regulators of other states who are all looking into potential securities violations by FTX and FTX-linked entities.
Tom Brady and his ex-wife, Gisele Bündchen, were notable faces associated with FTX:
As of now, regulators are pursuing every celebrity who has had some form of involvement with FTX. This has been going on for a while and Kim Kardashian, the prominent reality TV star and fashion icon was fined $1.26 million to settle charges brought over her by the Securities and Exchange Commission.
She was accused of promoting a crypto-related initiative on her social media page without publicly disclosing the fact that she was paid to do so. While Kim has not confirmed nor denied these accusations, the case has now been closed. Floyd Mayweather, the legendary boxer, was also named in a lawsuit earlier this year in which he was alleged to have misled his followers to be involved with a ‘pump and dump’ scheme.
The lawsuit against FTX was in talks since the moment the firm declared bankruptcy. An Oklahoma-based resident who had an account in FTX brought it to fruition by filing a class-action lawsuit in which Tom Brady, Stephen Curry, Gisele Bündchen, Larry David, Shaquille O’Neal, David Ortiz, Naomi Osaka, Trevor Lawrence, Kevin O’ Leary, and Udonis Haslem were all named.
Tom Brady and Gisele Bündchen had frequently appeared in FTX commercials and had equity in the company. The celebrities affiliated have been accused of promoting a ‘deceptive’ platform that has taken advantage of vulnerable retail investors. As per the lawsuit, FTX’s yield-bearing accounts have been accused of being unregistered securities sold in the US.
The crypto-giant has been called a “Ponzi scheme, misleading customers and prospective customers with the false impression that any cryptocurrency assets held on the Deceptive FTX platform were safe and were not being invested in unregistered securities,” as per the lawsuit.
FTX entered into multiple sports-related deals, many of which are now failing due to the latest developments. The Miami Heat recently announced that they would no longer be associated with FTX and have pledged to rename the team’s arena. Despite all the setbacks, former CEO Sam Bankman-Fried is still attempting to gather funding to bring his company back from failure.
However, while this is happening, the USA has been in touch with Bahamian authorities to extradite the former CEO, as the company is based out of the Bahamas. While he has actively been cooperating with investigators, he has not yet been brought back into the country for questioning. The fall of FTX sheds the light on the kind of influence that athletes have over the investment decisions of individuals. It teaches a valuable lesson that celebrities and athletes are the last persons that one should rely upon for financial advice.
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Sumedh Joshi
(2235 Articles Published)