Tuesday, January 31 2023
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The cryptocurrency market was rocked last week by the collapse of FTX, which filed for bankruptcy and saw CEO Sam Bankman-Fried resign after his assets plummeted in worth from $16 billion at the beginning of the week to virtually nothing. Several sports figures who were involved with the crypto exchange are facing repercussions. 

Tom Brady, Stephen Curry, Shohei Ohtani and other star athletes who were involved with FTX are among the defendants in a class-action lawsuit against the company filed in the U.S. District Court’s Southern District of Florida, which alleges that the athletes and Bankman-Fried violated state law and made consumers suffer more than $11 billion in damages. According to Fox Business, the suit describes the athletes as parties “who either controlled, promoted, assisted in, and actively participated in FTX Trading and FTX US (collectively, the “FTX Entities”), offer and sale of unregistered securities in the form of yield-bearing accounts (YBAs) to residents of the United States.”

The lawsuit seeks to hold FTX’s celebrity parties among others responsible “for the many billions of dollars in damages they caused Plaintiff and the Classes and to force Defendants to make them whole.”

Brady and his now ex-wife Gisele Bundchen are among the celebrity investors in FTX, as the two were announced as having taken major equity stakes in the company in 2021. The Tampa Bay Buccaneers quarterback has served as a brand ambassador for the company and starred in its commercials, receiving cryptocurrency in return, while Bundchen was named the company’s environmental and social initiatives adviser. 

Brady and FTX’s other major investors have now likely lost most if not all of their stake in the company, particularly after a deal for cryptocurrency giant Binance to rescue FTX fell through after a review of the company’s finances.

Brady is far from the only athlete and sports figure that is likely to take a major financial hit from FTX’s downfall.

Those three are part of a group of prominent athletes with FTX ties that also includes NBA legend Shaquille O’Neal, Jacksonville Jaguars quarterback Trevor Lawrence and Boston Red Sox great David Ortiz.

FTX’s downfall has also had a major impact elsewhere in the crypto space, which is impacting athletes who have invested in other forms of crypto. After it was reported that FTX-owned BlockFi now faces bankruptcy, it was noted that Detroit Pistons star Cade Cunningham is set to lose significant money due to a deal with BlockFi that entailed him receiving 100% of his signing bonus in Bitcoin.

FTX has major sponsorship and business deals with teams and leagues as well. Last December, FTX entered a $10 million international sponsorship with the Warriors, giving the brand a major presence throughout Chase Center and the franchise’s G League and NBA 2K teams. FTX also held the naming rights to the Miami Heat’s home arena and was a sponsor of Mercedes’ Formula 1 team.

On Nov. 11, the Heat, along with Miami-Dade County, released a statement saying they are terminating their relationship with FTX and are now looking for a new naming rights partner for their arena.

In Brady’s case, FTX’s collapse and its likely effect on his finances is the latest hit to his personal and professional bottom lines. Late last month, Brady and Bundchen announced they finalized their divorce.

Source: CBSSports.com


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