(San Francisco) Last fall, as cryptocurrency platform FTX imploded, seven-time Super Bowl winner quarterback Tom Brady made an urgent phone call.
He was trying to reach Sina Nader, head of partnerships at FTX. FTX staff were in a crisis meeting with its beleaguered founder, Sam Bankman-Fried. Nader could not answer. “I never imagined turning down a call from Tom Brady,” he said.
Brady was worried, and for good reason: as an “ambassador” for FTX, he had attended a company conference in the Bahamas and appeared in advertisements promoting FTX as the “most trusted” institution in the lightly regulated world. cryptocurrencies.
He also had money at stake. Under a promotional deal Brady signed in 2021, FTX paid him $30 million, almost entirely in FTX stock, according to three people familiar with the matter. His wife at the time, model Gisele Bündchen, received $18 million in FTX stock, according to a source.
Additionally, the promotional contract requires the couple, who divorced in 2022, to pay taxes on at least some of their now worthless FTX stock, according to two people briefed on the terms of the contract.
It is one of the most publicized fiascos involving the actors, athletes and other celebrities who accepted easy money and contributed to the euphoria generated by cryptocurrencies on the internet. During the bubble, Paris Hilton, Snoop Dogg, Reese Witherspoon, and Matt Damon all touted or invested in cryptocurrency projects, bringing the bizarre world of digital currencies to mainstream attention. It was fun – and rewarding – when the prices skyrocketed.
But the crash of 2022 extinguished celebrities’ passion for cryptomania.
In December, a California attorney sued two cryptocurrencies, MoonPay and Yuga Labs, accusing them of using an “extensive network of musicians, athletes, and celebrity clients” to mislead investors about digital assets.
In March, the SEC accused actress Lindsay Lohan, influencer Jake Paul and musicians including Soulja Boy and Lil Yachty of illegally promoting cryptoassets. In late May, a bailiff served court documents on retired basketball star Shaquille O’Neal, who is being sued for his FTX promotion. O’Neal, who commentates NBA games on TV, was visited by the usher during an NBA playoff game.
Brady, Bankman-Fried and MoonPay declined to comment for this article. A Yuga Labs spokesperson said the company had “never paid a celebrity to join the club.” Interview requests to Ms. Bündchen and Mr. O’Neal went unanswered.
Young tech companies and celebrities have a symbiotic relationship. Start-ups offer celebrities a way to earn money while promoting their social media presence; celebrities boost the credibility of young companies and attract a wider audience.
No cryptocurrency company has relied on celebrities to promote itself as much as FTX. When Bankman-Fried set out to raise awareness for FTX, he compiled a list of celebrities to tap into to promote the company, says Nader, the ex-FTX executive. Tom Brady was at the top of the list.
A former college football player, Nader was responsible for recruiting Brady and other stars. In June 2021, Brady and Bündchen signed a contract with Bankman-Fried, and touted “FTX’s groundbreaking team.” Brady seemed genuinely interested in crypto, Nader said, and occasionally discussed it with Bankman-Fried.
In 2021, Brady co-founded Autograph, which helps celebrities sell crypto-collectibles, or “non-fungible tokens.” Autograph has raised over US$200 million and Bankman-Fried has joined the board.
Soon after, Brady and Bündchen starred in a $20 million ad campaign for FTX, with ads running during NFL games. Brady posted videos on TikTok with Bankman-Fried from FTX’s Bahamas headquarters, where he spoke at a conference in front of hundreds of people.
Backstage, Bankman-Fried said he could see himself one day buying a football team with Brady. At this conference, Bündchen served as the environmental and social initiatives manager for FTX.
When FTX crashed in November, the company’s valuation went from $32 billion — including $48 million in Brady and Bündchen stock — to zero. The couple also received a small amount of Ethereum, Bitcoin and Solana tokens to trade on the platform, a source said. Everything evaporated in the bankruptcy of FTX.
Brady has made no statement about FTX or his relationship with Bankman-Fried. After FTX’s crisis meeting in November, Nader called him back.
“He was worried,” Nader said. Straight away, he asked me, “Sina, how are you? I know you put your heart and soul into this.” »
Brady’s other crypto business also suffered. Autograph’s revenue plummeted in 2022 with the cryptocurrency crash, according to a person familiar with the company’s finances. Autograph has changed its strategy: it now helps celebrities build fan loyalty and relies less on selling non-fungible tokens to collectors.
Autograph also cut more than 50 positions, Insider magazine reported. A spokesperson for Autograph declined to comment.
Brady is also in legal trouble. In December, law firms Adam Moskowitz and Boies Schiller Flexner filed a class action lawsuit in federal court in Florida, accusing Brady and Bündchen of misleading investors. Also being sued are comedian Larry David, NBA star Steph Curry and tennis player Naomi Osaka, all of whom promoted FTX.
“Neither of these defendants did any due diligence before promoting FTX products to the public,” the suit states. Some celebrities narrowly escaped the cryptocurrency fiasco. Singer Taylor Swift had talks with FTX that didn’t go through. After six months of negotiations, CEO Bankman-Fried has ended talks on a endorsement deal that would have earned the singer up to $100 million.