Tom Brady's Ftx Crypto Investment: Was It Worthwhile?

NFL legend Tom Brady and his then-wife, Gisele Bündchen, were both investors in and ambassadors for the FTX cryptocurrency exchange. In June 2021, the couple announced an equity deal with FTX, with Brady becoming a brand ambassador and Bündchen an environmental and social initiatives adviser. They starred in several commercials for the company, promoting the ease and accessibility of the platform. However, following the collapse and bankruptcy of FTX in November 2022, Brady has been caught in the fallout, facing lawsuits and potentially losing his strategic investment.

Tom Brady's $55 million earnings from promoting FTX

In June 2021, during the bullish days of crypto, NFL quarterback legend Tom Brady and his then-wife, Gisele Bündchen, announced an equity deal with FTX. Brady became a brand ambassador for the exchange, while Bündchen took on an advisory role for environmental and social initiatives. The couple's involvement with FTX was highly publicised, with both starring in several commercials for the company.

According to Michael Lewis' biography about Sam Bankman-Fried, "Going Infinite: The Rise and Fall of a New Tycoon," Brady was paid a staggering $55 million for just 20 hours of work over three years. This equates to a ""pretty good hourly wage," as CNBC's Jon Wertheim remarked in an interview with Lewis.

The deal seemed to be a lucrative one for Brady, especially considering the short amount of time he had to commit to it. However, the collapse of FTX in November 2022 put a different spin on things. Following the exchange's downfall, Brady faced a backlash for his involvement and was even sued for defrauding investors, alongside Bündchen and other celebrities who had promoted FTX.

While the exact financial relationship between FTX and its celebrity endorsers is unclear, the lawsuit alleges that these sports and TV stars lent instant credibility to FTX and should be held culpable for the company's failure. As a result, Brady's $55 million earnings from promoting FTX have become a controversial topic, with regulators launching investigations into the payments received by the celebrities involved.

The class-action lawsuit against Tom Brady

Background

Tom Brady, the seven-time Super Bowl champion, and his then-wife, Gisele Bündchen, announced in June 2021 that they had closed an equity deal with FTX. Brady became a brand ambassador for the exchange, while Bündchen became an environmental and social initiatives advisor. The couple also starred in several FTX commercials.

The FTX Collapse

FTX, once the world's third-largest crypto exchange, filed for voluntary Chapter 11 bankruptcy in November 2022. The company's founder, Sam Bankman-Fried, was accused of misusing funds and commingling funds between FTX and his hedge fund, Alameda Research. This led to a liquidity crisis, with investors scrambling to withdraw their holdings.

The Class-Action Lawsuit

In the aftermath of the FTX collapse, a class-action lawsuit was filed in Florida against 11 athletes and celebrities who promoted FTX, including Tom Brady, Gisele Bündchen, and Larry David. The lawsuit seeks $11 billion in damages on behalf of US investors who held FTX yield-bearing accounts funded with crypto assets.

The plaintiffs allege that FTX lured investors to its yield-bearing accounts and transferred funds to related entities to maintain the appearance of liquidity. They further claim that the celebrity endorsers engaged in a conspiracy to defraud investors and violated Florida state laws prohibiting unfair business practices. Specifically, they allege that the celebrities made misrepresentations and omissions about the FTX platform to instill confidence and drive consumers to invest in what was ultimately a Ponzi scheme.

Implications for Celebrity Endorsements

The FTX case has raised questions about the responsibility of celebrities when endorsing financial products. While celebrities have been targeted for promoting cryptocurrencies in the past, the FTX lawsuit is notable for directly naming the celebrity endorsers as defendants. This case could set a precedent for holding celebrities legally responsible for the products and services they endorse, particularly in the context of securities offerings.

Tom Brady's Response

Tom Brady has not publicly addressed the lawsuit directly. However, he has expressed disappointment in the wake of the FTX collapse, stating that it has been a "rough year" for him, including a divorce and a tarnished record after coming out of retirement.

Gisele Bündchen's involvement with FTX

Gisele Bündchen, along with her then-husband Tom Brady, was a prominent face of FTX. In June 2021, the supermodel and her NFL quarterback ex-husband announced an equity deal with FTX, with Brady becoming a brand ambassador for the exchange and Bündchen taking on an environmental and social initiatives advisory role. The couple's endorsement deal included payments in crypto, with Bündchen receiving $18 million in FTX stock and a small amount of Ethereum, Bitcoin, and Solana tokens.

Bündchen expressed her excitement about the partnership, stating:

> "It was fascinating getting to know more about the crypto universe! Cryptocurrency will become more and more familiar to all of us as time goes on. What attracted me most about this partnership was the potential to apply resources to help regenerate the Earth, and enable people to lead better lives, therefore generating real transformation in our society."

Following the collapse of FTX, Bündchen is reported to have lost an estimated $25 million in shares, expressing that she was "blindsided" by the incident and praying for justice to be served. She and Brady are among the celebrities being sued by FTX customers and are facing a class-action lawsuit for promoting the company.

Tom Brady's social media clean-up after FTX's bankruptcy

In November 2022, American football star Tom Brady removed his tweets promoting FTX, the cryptocurrency exchange that filed for bankruptcy in November 2022. Brady and his ex-wife, supermodel Gisele Bündchen, were investors and brand ambassadors for FTX. They had appeared in a series of commercials for the exchange and were among its prominent faces.

Brady and Bündchen had closed an equity deal with FTX in June 2021, with Brady becoming a brand ambassador and Bündchen an environmental and social initiatives advisor. In a press release, Brady had expressed excitement about the "incredibly exciting time in the crypto-world" and the importance of "educating people about the power of crypto." The deal was worth an estimated $70 million for the couple, with Brady's investment valued at around $45 million and Bündchen's at $25 million.

However, after FTX's bankruptcy, Brady's investment is now worth significantly less. FTX's CEO, John Ray III, has stated that only bondholders will be able to recoup some losses during bankruptcy proceedings, while equity investors typically lose their investments. Brady and Bündchen are listed as holding over 1.1 million and 680,000 common shares, respectively, in FTX, making them major stakeholders.

The Texas State Securities Board has also opened an investigation into celebrities who promoted FTX, including Brady, Bündchen, and another sports star, Steph Curry. The regulator is reviewing the payments these celebrities received for their endorsements.

With the fallout from FTX's bankruptcy continuing, Brady's social media clean-up reflects the potential legal and financial repercussions he faces as a result of his involvement with the failed cryptocurrency exchange.

The impact of FTX's collapse on Tom Brady's net worth

In June 2021, Tom Brady and his then-wife, Gisele Bündchen, announced an equity deal with FTX.com and FTX.US, with Brady becoming a brand ambassador for the exchange and Bündchen an environmental and social initiatives advisor. The financial terms of the deal were not disclosed, but Brady is believed to have received $30 million in FTX stock for his promotional services, while Bündchen received $18 million in stock.

Following the collapse of FTX in November 2022, Brady's investment in the company became worthless, resulting in a significant loss for the NFL star. The exact impact on his net worth is unclear, but it is estimated that he lost almost $30 million due to the worthless stock. Brady's net worth before the FTX collapse was estimated to be around $250 million to $300 million, not including Bündchen's net worth of $400 million.

In addition to the financial loss, Brady also faced legal repercussions. He was named in a class-action lawsuit filed in Florida, accusing him and other celebrities of defrauding investors and promoting a Ponzi scheme. The lawsuit claimed that these celebrities lent their names and credibility to FTX, coaxing naïve investors into investing in the exchange. As a result, Brady has been sued by FTX customers seeking compensation for their losses.

The collapse of FTX and the subsequent loss of Brady's investment had a notable impact on his finances, resulting in a substantial reduction in his net worth. The exact figures are not publicly available, but the loss of $30 million would represent a significant portion of his overall wealth.

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