How Tom Brady’s crypto ambitions collided with reality
Sign up now: Get ST's newsletters delivered to your inbox
As an FTX “ambassador,” Tom Brady promoted the start-up as “the most trusted” institution in crypto.
PHOTO: NYTIMES
Follow topic:
SAN FRANCISCO – As the FTX cryptocurrency exchange imploded last autumn,
Brady called FTX’s head of partnerships Sina Nader, who was in the middle of a crisis meeting with the exchange’s beleaguered founder Sam Bankman-Fried, and could not answer.
“I never would’ve expected to decline a call from Tom Brady,” Mr Nader 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 television 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 US$30 million (S$40.6 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 Bundchen, was paid US$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 Bundchen, 42, have been sued by a group of FTX customers
Their situation is the highest-profile 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, heiress Paris Hilton, rapper Snoop Dogg, actress Reese Witherspoon and actor 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 2022’s crash ended the celebrity crypto bonanza.
In October, the US Securities and Exchange Commission (SEC) ordered reality TV star Kim Kardashian to pay US$1.26 million
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 retired basketball star Shaquille O’Neal, who was sued for promoting FTX, according to legal filings.
He was served while broadcasting from a National Basketball Association play-off game.
Tech start-ups and celebrities have long had a symbiotic relationship.
The start-ups 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 start-ups 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 Mr Nader, the former FTX executive.
Brady’s name was at the top.
A former college football player, Mr Nader was in charge of recruiting Brady and other stars.
In June 2021, Brady and Bundchen agreed to a deal with Bankman-Fried, praising the “revolutionary FTX team”.
Brady seemed genuinely interested in crypto, Mr Nader said, and occasionally had conversations with Bankman-Fried.
“Imagine a tiger and a lion talking,” Mr Nader said. “They’re slightly different, they do different things, but they’re really formidable in their own arenas.”
In 2021, Brady also co-founded Autograph, which helps famous people sell the crypto collectibles known as non-fungible tokens, or NFTs.
Autograph raised more than US$200 million from investors, and Bankman-Fried joined the board.
That same year, Brady and Bundchen starred in a US$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.
Bundchen also appeared at the conference as FTX’s head of environmental and social initiatives.
When FTX collapsed in November, the company’s US$32 billion valuation – including Brady and Bundchen’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.
FTX’s chief executive Sam Bankman-Fried and supermodel Gisele Bundchen, who was an environmental adviser to the company, at the exchange’s conference in the Bahamas on April 27, 2022.
PHOTO: NYTIMES
Brady’s other crypto venture has also struggled. Autograph’s revenue sank in 2022 amid the crypto meltdown, a person familiar with its finances said.
Autograph has also cut more than 50 employees in layoff rounds, a person said.
Brady has also faced legal trouble.
In December, Mr Adam Moskowitz and the law firm Boies Schiller Flexner filed a lawsuit in federal court in Florida accusing him and Bundchen of misleading investors.
Among the other defendants are comedian Larry David, National Basketball Association star Steph Curry and tennis player Naomi Osaka, all of whom endorsed FTX.
“None of these defendants performed any due diligence prior to marketing these FTX products to the public,” the lawsuit said.
Some celebrities narrowly escaped the crypto mess. Pop star Katy Perry held talks about a partnership with FTX that never came to fruition, three people familiar with the situation have said.
In spring 2022, American singer Taylor Swift discussed a deal with FTX that could have paid as much as US$100 million, two people familiar with the matter said.
Mr Moskowitz, the lawyer suing the celebrities, said on a podcast in April that Swift had conducted due diligence on FTX, asking the exchange to prove that its cryptocurrencies were not unregistered securities.
His comments led to a flurry of headlines about Swift’s business acumen.
But in an interview with The New York Times, Mr Moskowitz said he had no inside information about the talks.
In reality, Swift’s side signed the sponsorship agreement with FTX after more than six months of discussions, three people with knowledge of the deal said, and it was Bankman-Fried who pulled out.
The last-minute reversal left Swift’s team frustrated and disappointed, two of the people said.
A spokesman for Swift declined to comment. NYTIMES
