NFL icon Tom Brady is being sued along with a number of other famous celebrities and sporting personalities over their promotion of failed cryptocurrency exchange FTX.
The seven-time Super Bowl champion will join a number of celebrities after they were named as defendants in a class-action lawsuit against the cryptocurrency firm. It is alleged by investors that their public status made them culpable for promoting the company’s failed business model.
Last week, FTX filed for bankruptcy to end a disastrous few days for the previous third-largest cryptocurrency exchange in the world when the week began. The company’s CEO and founder, Sam Bankman-Fried, has resigned after the firm - which has lost billions - inquired regarding bankruptcy protection.
The Bahamas-based company along with Bankman-Fried are under investigation by state and federal authorities for allegedly investing depositors funds in ventures without their approval. The House Financial Services Committee has also confirmed plans to hold a hearing on FTX and is failure in December.
FTX became notorious after it entered into a number of sports-related deals, including with Mercedes for F1 racing, a sponsorship deal with Major League Baseball whose umpires wear the company’s logo, as well as deals with Brady and NBA superstars Steph Curry and Shaquille O’Neal. The lawsuit - which was filed on Tuesday - claims the sports and TV celebrities brought credibility to FTX by association and should be held accountable.
“Part of the scheme employed by the FTX Entities involved utilising some of the biggest names in sports and entertainment - like these Defendants - to raise funds and drive American consumers to invest… pouring billions of dollars into the deceptive FTX platform to keep the whole scheme afloat,” the lawsuit said.
The lawsuit was field in the Southern District of Florida and class-action attorney Adam Moskowitz pointed to previous precedent whereby the U.S. government fined celebrities and sports stars like Kim Kardashian and boxing icon Floyd Mayweather for promoting failed cryptocurrency schemes. He said: “The crypto industry needed celebrity endorsers to get any credibility.”
Last year, Brady and model former wife Gisele Bundchen took an equity stake in FTX - which was bailed out by rival Binance amid crashing investments. The duo even appeared in FTX advertisements and were reportedly paid in cryptocurrency.
David Boies, who represented Al Gore in the 2000 U.S. election, is also named as an attorney on the case while the plaintiff in the case is Pierce Robertson, who is also involved in a case involving Voyager Digital, another failed cryptocurrency company. Voyager Digital failed for bankruptcy protection this summer, but FTX had pledged to buy Voyager’s assets for $1.4billion (£1.1bn).
The Miami Heat are also impacted by the company entering bankruptcy. Their home arena will no longer bear FTX’s name despite the fact that the company signed a 19-year, $135million (£114m) deal last year. The building had been called the FTX Arena since June 2021.
The Heat were to receive $2m (£1.68m) annually as part of the deal, with most of the rest - roughly $90m (£76m) over the lifetime of the agreement - was to be paid to the county, with the vast majority of it set to go towards fighting gun violence and poverty.
The Heat organisation released a statement along with the Miam-Dade County following the news regarding FTX, which read: “The reports about FTX and its affiliates are extremely disappointing.
"Miami-Dade County and the Miami Heat are immediately taking action to terminate our business relationships with FTX, and we will be working together to find a new naming rights partner for the area.”
Tom Brady has been contacted for comment.
