For Brady, costly crypto ambitions
Fallout of FTX debacle includes suits, big losses
SAN FRANCISCO — As the FTX cryptocurrency exchange imploded last fall, Tom Brady, the seven-time Super Bowl-winning quarterback, made an urgent phone call.
He dialed Sina Nader, FTX’s head of partnerships. The exchange’s staff was in the middle of a crisis meeting with its beleaguered founder, Sam BankmanFried. Nader couldn’t answer. “I never would’ve expected to decline a call from Tom Brady,” he said.
Brady had reasons to be concerned. As an “ambassador” for FTX, he had appeared at the company’s conference in the Bahamas and in TV commercials that promoted the exchange as “the most trusted” institution in the loosely regulated world of crypto.
His money was also at stake. As part of an endorsement agreement Brady signed in 2021, FTX had paid him $30 million, a deal that consisted almost entirely of FTX stock, three people with knowledge of the contract said. Brady’s wife at the time, supermodel Gisele Bündchen, was paid $18 million in FTX stock, one of the people said.
Now FTX is bankrupt, and Bankman-Fried is facing criminal fraud charges. Brady, 45, and Bündchen, 42, have been sued by a group of FTX customers seeking compensation from the celebrities who endorsed the exchange. On top of it all, the terms of the deal would have required the former couple, who divorced last year, to pay taxes on at least some of their now worthless FTX stock, two people familiar with the endorsement deal said.
Their situation is the highestprofile example of a humiliating reckoning facing the actors, athletes, and other celebrities who rushed to embrace the easy money and online hype of cryptocurrencies. During the boom times, Paris Hilton, Snoop Dogg, Reese Witherspoon, and Matt Damon all gushed about or invested in crypto projects, bringing a mainstream audience to the wonky world of digital currencies. It was fun — and lucrative — while prices soared.
But last year’s crash ended the celebrity crypto bonanza.
In October, the Securities and Exchange Commission ordered Kim Kardashian to pay $1.26 million for failing to make adequate disclosures when she endorsed the EthereumMax crypto token. In December, a lawyer in California sued two crypto companies, MoonPay and Yuga Labs, accusing them of using a “vast network of A-list musicians, athletes and celebrity clients” to mislead investors about digital assets.
In March, the SEC charged actress Lindsay Lohan, online influencer Jake Paul, and musicians including Soulja Boy and Lil Yachty with illegally promoting crypto assets. And in late May, after months of failed attempts, a process server delivered court papers to Shaquille O’Neal, the retired basketball star, who was sued for promoting FTX, according to legal filings. O’Neal was served while broadcasting from a National Basketball Association playoff game.
Representatives for Brady, Bankman-Fried, and MoonPay declined to comment. A spokesperson for Yuga Labs said the company had “never paid a celebrity to join the club.” Representatives for Bündchen and O’Neal did not respond to requests for comment.
Tech startups and celebrities have long had a symbiotic relationship. The startups offer stars a way to make money while staying on the cutting edge of Internet culture; the celebrities help young companies gain credibility and reach a larger audience.
Of all the startups that recruited celebrities to endorse crypto, FTX was perhaps the most eager. As Bankman-Fried tried to turn FTX into a household name, he made a list of celebrities he could envision promoting the company, recalled Nader, the former FTX executive. Brady’s name was at the top.
A former college football player, Nader was in charge of recruiting Brady and other stars. In June 2021, Brady and Bündchen agreed to a deal with Bankman-Fried, praising the “revolutionary FTX team.” Brady seemed genuinely interested in crypto, Nader said, and occasionally had conversations with Bankman-Fried.
“Imagine a tiger and a lion talking,” Nader said. “They’re slightly different, they do different things, but they’re really formidable in their own arenas.”
In 2021, Brady also cofounded Autograph, which helps famous people sell the crypto collectibles known as non-fungible tokens, or NFTs. Autograph raised more than $200 million from investors, and Bankman-Fried joined the board.
That same year, Brady and Bündchen starred in a $20 million advertising campaign for FTX, with commercials that ran during NFL games. Brady also posted TikTok videos with Bankman-Fried from FTX’s headquarters in the Bahamas, where he spoke at a conference in front of hundreds. Backstage, Bankman-Fried remarked that he could imagine buying a football team someday with Brady. Bündchen also appeared at the conference as FTX’s head of environmental and social initiatives.
When FTX collapsed in November, the company’s $32 billion valuation — including Brady and Bündchen’s $48 million in shares — plummeted to zero. The couple had also received a small amount of ethereum, bitcoin, and solana tokens to trade on the platform, one of the people said, which disappeared in FTX’s bankruptcy.
Brady has not commented publicly on FTX or his relationship with Bankman-Fried. After FTX’s crisis meeting in November, Nader called him back.
“He was concerned,” Nader said. “The very first thing he asked me was: ‘Sina, how are you doing? I know you put your heart and soul into this.’”
Bündchen said in a March interview with Vanity Fair that she had “trusted the hype” and felt “blindsided.”
Brady’s other crypto venture has also struggled. Autograph’s revenue sank last year amid the crypto meltdown, a person familiar with its finances said. The startup has shifted its strategy to focus more on helping celebrities find ways to foster loyalty with their fans, and less on marketing crypto tokens to consumers, the person said. The firm has also removed some crypto language from its marketing, downplaying terms like NFT, another person with knowledge of the company said.
Autograph has also cut more than 50 employees in layoff rounds, a third person said. The reductions were reported earlier by Insider. An Autograph spokesperson declined to comment.
Brady has also faced legal trouble. In December, Adam Moskowitz and the law firm Boies Schiller Flexner filed a lawsuit in federal court in Florida accusing him and Bündchen of misleading investors. Among the other defendants are comedian Larry David, NBA star Steph Curry, and tennis player Naomi Osaka, all of whom endorsed FTX.