The FTX cryptocurrency exchange debacle continues to wreak havoc.
FTX was the crown jewel of 30-year-old former trader Sam Bankman-Fried's cryptocurrency empire.
The platform where you could buy and sell digital currencies was based in the Bahamas and had a subsidiary in the United States, FTX US, for people living in the United States. FTX also had close ties with Alameda Research, a hedge fund and trading platform founded by Bankman-Fried.
The group was one of the central pieces of the cryptocurrency industry. Its founder was the institutional face of the crypto space until the company filed for Chapter 11 bankruptcy on November 11 when it ran out of cash and therefore could not meet the demands of its panicked customers who wanted liquidate their cryptocurrencies.
Texas Is Investigating Brady, Curry
Regulators have launched investigations. But some of the surveys also concern FTX ambassadors, including celebrities who promoted the platform. The Texas State Securities Board has just opened an investigation against celebrities including sports stars Tom Brady, Steph Curry, and supermodel Gisele Bündchen.
The regulator is reviewing payments these celebrities received to support FTX US, Joe Rotunda, director of enforcement told Bloomberg News.
"We are taking a close look at them," Rotunda said. He added that endorsements of Tampa bay Buccaneers quarterback Tom Brady and the Golden State Warriors's Steph Curry "aren't the most immediate priority, they're still a focus in the regulator's large probe into FTX's collapse."
Rotunda did not immediately respond to a request for comment from TheStreet.
You can read the FTX downfall timeline here.
The Texas regulator's investigation is an additional thorn for Brady, Curry and Bündchen who are already the subject with other celebrities of a class action lawsuit filed in Florida last week accusing them of having promoting Ponzi scheme.
"The deceptive FTX platform maintained by the FTX entities was truly a house of cards, a Ponzi scheme where the FTX entities shuffled customer funds between their opaque affiliated entities, using new investor funds obtained through investments in the YBAs and loans to pay interest to the old ones and to attempt to maintain the appearance of liquidity," the lawsuit said.
Biggest Names
The plaintiffs added that "part of the scheme employed by the FTX entities involved utilizing some of the biggest names in sports and entertainment — like these defendants — to raise funds and drive American consumers to invest in the YBAs, which were offered and sold largely from the FTX entities’ domestic base of operations here in Miami, Florida, pouring billions of dollars into the deceptive FTX platform to keep the whole scheme afloat."
In addition to Brady, Curry and Bündchen, the lawsuit named Bankman-Fried, former NBA star Shaquille O’Neal, Udonis Haslem, David Ortiz, NFLY young star Trevor Lawrence, baseball star Shohei Ohtani, tennis star Naomi Osaka, "Seinfeld" creator Larry David and businessman Kevin O’Leary, aka 'Mr Wonderful'.
Curry signed a partnership with FTX in September 2021, which was his first investment in the crypto industry. His foundation, Eat.Learn.Play., also partnered with the exchange on charitable initiatives.
Brady and Bündchen have an equity stake in FTX. The equity stake was not disclosed, but FTX said they would receive an unspecified amount and type of crypto.
They have starred in several FTX commercials.
The actions against Brady, Curry and Bundchen are reminiscent of those of reality TV star Kim Kardashian, who reached a settlement last October with the U.S. Securities and Exchange Commission (SEC) that accused him of promoting a cryptocurrency that turned out to be a scam.
Kardashian paid agreed to pay $1.26 million in penalties to settle the investigation. She also agreed not to promote any crypto-asset securities for three years. But she neither admitted to nor denied the regulator’s findings.
