Tom Brady and other celebrities navigate through Crypto Crash
Even as the crypto market returns to form, celebrities are still feeling the sting of the multiple industry disasters and frauds last year that they unknowingly 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 who claim to have been “misled” by said ambassadors. Many other prominent names are included in the lawsuit, including Larry David, David Ortiz and the Golden State Warriors.
However, representatives like Brady have also been hurt, as the $30 million he received to promote the trade is now virtually worthless. What’s worse, the terms of the deal may require you to pay taxes on some of those shares, according to people familiar with the deal.
Sina Nader, former FTX Director 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, whom he envisioned representing the company, of which Brady’s name was at the top.
Since last year, Tom Brady has suffered with his own crypto company called Autograph, which raised $200 million to help celebrities sell their NFTs to fans. Faced with falling revenue in 2022, the person familiar with the company’s finances said he changed strategies to help build celebrity loyalty in general, instead of focusing on NFTs.
How are other celebrities doing?
Shark Tank star Kevin O’Leary was also paid $15 million to promote FTX less than 2 months after Brady. Like the former, some of his compensation was paid in cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and Solana (SOL), all of which have since been lost to 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 it was served another set of legal documents during his attendance at an NBA playoff game for his founding and promotion of a Solana-based NFT project called Astrals, which the lawsuit claims involved “unregistered securities.”
The US Securities and Exchange Commission (SEC) forced Kim Kardashian to pay $1.26 million for failing to disclose her promotion of the EthereumMax crypto token last year. In March, the SEC targeted other stars like Lindsay Lohan and Jake Paul with similar charges.
Certain congressmen have criticized the SEC for its “selective” enforcement actions against famous figures and not more damaging players in the crypto space.