A federal judge dismissed nearly all claims against sports figures like Tom Brady and Shohei Ohtani in a lawsuit related to the FTX crypto crash. The judge ruled that there was insufficient proof the celebrities knew of FTX’s fraudulent activities. As a result, most lawsuits against the endorsers have failed, even as they faced massive financial losses from their endorsements and investments in the crypto market.
A federal judge has dismissed almost all claims in a lawsuit involving prominent figures like Tom Brady and Shohei Ohtani, who had endorsed the collapsed cryptocurrency exchange FTX. The ruling, issued by United States District Judge K. Michael Moore in Miami, struck down 12 of the 14 claims, citing insufficient evidence that these investors knowingly participated in any fraud. In his 49-page decision, Judge Moore stated that the celebs’ endorsements did not demonstrate a conspiracy or any underlying fraudulent conduct.
FTX had attracted a star-studded roster of endorsers, becoming somewhat of a phenomenon in 2022 as marquee names endorsed the platform. However, the reality was that FTX’s founder, Sam Bankman-Fried, misled investors, ultimately causing one of the largest financial collapses in recent memory. As billions were lost in this debacle, numerous celebrities now face class-action lawsuits over their promotional activities.
Of noteworthy mention, Tom Brady saw significant financial fallout from his involvement with FTX, reportedly losing around $30 million as the company fell apart. His ex-wife, Gisele Bundchen, was also affected, with losses amounting to roughly $18 million. The situation speaks to the risks inherent in celebrity endorsements, especially in the turbulent world of cryptocurrency.
In an ironic twist, while Brady faced his crypto challenges, he also spent a hefty sum to buy a Bored Ape NFT in April 2022. Valued at about $430,000 at the time—sourced from a payment of 133 ether—the asset has since plummeted in value to an estimated $273,000. So, you might say Brady has had his share of unfortunate ventures in this volatile market.
For those curious about prior legal entanglements in this space, Kim Kardashian previously agreed to pay $1.26 million over her promotional practices concerning a cryptocurrency token. She was found lacking in adequate disclosures about her financial involvement, underscoring the importance of transparency in crypto marketing.
As for Bankman-Fried, he faced the music after the dust settled, being convicted of fraud and related charges by November 2023. His sentencing in March 2024 arrived with a hefty 25-year prison term and an order to forfeit a staggering $11 billion, showing that in the end, crime does not pay — as well as highlighting the pitfalls of celebrity endorsement culture in the crypto landscape.
