Local sporting icons Tom Brady and Steph Curry are among celebrities being investigated for potential securities-law violations tied to their business relationships with the failed crypto exchange, FTX.
The spectacular fall of Sam Bankman-Fried’s FTX has called into question just how much should celebrities be on the hook for their endorsements when they flop.
Joe Rotunda, enforcement director at the Texas State Securities Board, told Bloomberg News that he is looking into payments to the celebrities for endorsing FTX.
However, a state-level investigation does not carry the same weight as one conducted by the U.S. Securities and Exchange Commission, which is also investigating FTX.
The sudden scrutiny seemed to be enough to spook Brady, who has scrubbed all mentions of FTX from his Twitter.
Curry is yet to do the same. As of publication, his Twitter account still has 13 FTX-related tweets up. The tweets paint a picture of how the basketball superstar used his brand and platform to boost FTX’s profile.
Curry was contacted for comment via his sc30.com site but has not responded.
The Golden State Warriors superstar first partnered with FTX in September 2021, which by then had already secured sponsorship deals with Major League Baseball, Miami Heat, UC Berkeley and Shaquille O’Neal among other high profile celebrities and brands.
Curry also had his own line of NFTs that were only accessible via FTX. Dubbed the “2974 Collection,” he partnered with the company to mint 2,974 unique images celebrating each of his career three-pointers up to the date he broke the NBA’s all time record for scoring threes.
The NFTs were sold for $499 a piece with all proceeds going to "Eat. Learn. Play," a foundation that he and wife, Ayesha, established in 2019.
In March, Curry and O’Neal starred in a television commercial together for FTX where the former insisted that he was “no [crypto] expert” and that he “didn’t need to be [because] with FTX, he had everything he needed to buy, sell and trade crypto safely.”
When The Standard tried to view Curry’s 2974 Collection on FTX, they were no longer accessible.
The Texas investigation comes hot on the heels of another class-action lawsuit involving Curry, Brady and a long list of celebrities that includes the latter’s ex-wife Gisele Bundchen, tennis superstar Naomi Osaka, MLB’s Shohei Ohtani, comedian Larry David and investor personality Kevin O’Leary as co-defendants. The Golden State Warriors are also named on the suit.
“FTX’s fraudulent scheme was designed to take advantage of unsophisticated investors from across the country, who utilize mobile apps to make their investments,” Oklahoma resident Edwin Garrison said in a complaint filed in federal court in South Florida. He is demanding the FTX and celebrity endorsers shell out $11 billion in damages.
On Monday, a second lawsuit landed on the desk of Curry’s employers—The Warriors. The class-action lawsuit was filed in San Francisco federal court by FTX customer Elliott Lam. He said he lost $750,000 in the firm’s collapse and alleges that the Warriors wrongfully promoted the failed company when it had knowledge of FTX’s wrongdoings.
Up until last month, FTX was allegedly a multibillion dollar crypto exchange. But underneath its glossy surface as one of the most valuable companies in the world was a brewing financial disaster. The company was actually drowning in debt, and $1 billion in customer funds are now reportedly missing.
The fallout from the FTX collapse continues a trend of higher scrutiny of the crypto industry, which had operated with few regulations during the last decade. Last month, Kim Kardashian was charged by the SEC with unlawfully touting EMAX tokens, a cryptocurrency, on her social media and not disclosing that she was paid by the exchange that sold it. She agreed to pay $1.26 million in penalties.
Although Curry’s promotion of FTX has turned out to be a disaster, it has not deterred him from diving deeper into the digital space.
Last month, he also filed a trademark application for something called the Curryverse, a metaverse where participants can earn and trade—wait for it—NFTs.
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