On Independence Day, Tom Brady tweeted an advertisement he starred in for cryptocurrency exchange FTX. In the ad, he’s dressed in board shorts and a T-shirt and uses a flamethrower to melt a block of ice and release some cartoon bitcoin.
“You don’t need a flamethrower to buy, sell, and trade bitcoin and crypto safely. You just need FTX,” he says in the ad. It was part of a major marketing campaign led by FTX, which paid household names to promote digital currencies to at-home investors.
But it turns out that things weren’t so safe. The Bahamas-based company went into bankruptcy late last week, and customers are unable to retrieve their funds.
And now there’s a class-action lawsuit underway. The suit, filed in the Southern District of Florida yesterday, names a series of high-profile people for their roles in promoting FTX, including Brady, his ex-wife Gisele Bündchen, Steph Curry, Shaquille O’Neal, Naomi Osaka, Larry David, David Ortiz, and Shark Tank star Kevin O’Leary.
It is not the first time that celebrities have found themselves under scrutiny for promoting digital currencies. Last month, the Securities and Exchange Commission announced that it had fined Kim Kardashian $1.26 million for failing to disclose that she had been paid for posting an ad for crypto on her Instagram page.
The filing also names FTX’s founder and former CEO, Sam Bankman-Fried, as a defendant. The onetime golden child of the crypto sector oversaw the company until it declared bankruptcy. It has since been reported that FTX was moving customers’ cash into an investment fund that it owned.
The case was filed by the Moskowitz Law Firm in conjunction with Boies Schiller Flexner LLP. They claimed that American consumers lost $11 billion when FTX went down.
“FTX were geniuses at public relations and marketing, and knew that such a massive Ponzi scheme, larger than the [Bernie] Madoff scheme, could only be successful with the help and promotion of the most famous, respected, and beloved celebrities and influencers in the world,” class action attorney Adam Moskowitz said in a press release.
The lead plaintiff is Edwin Garrison of Oklahoma. According to Joseph Kaye of the Moskowitz Law Firm, a cocounsel on the case, Garrison was trying to generate some money for his 18-month-old granddaughter and lost his entire investment.
“It’s really sad,” Kaye told BuzzFeed News. “[Garrison] had a long-term approach on it and was just trying to do right by her. And now he completely lost the entire investment. So it’s very significant to him. There are others whose entire 401(k) went into the platform and is now gone.”
The lawsuit details the ways various celebrities were enlisted by FTX to promote the company, including the $20 million deal signed by Brady and Bündchen. They were paid in a combination of stock — now virtually worthless — and digital currency. Bündchen was also made a philanthropic adviser to FTX.
The pair have since divorced. Brady’s representative did not respond to BuzzFeed News’ questions about his relationship with FTX, though he has deleted his promotional tweets. Bündchen’s reps responded to BuzzFeed News’ email but did not address specifics. (BuzzFeed News reached out to all of the defendants in the suit but has yet to receive any additional replies.)
This afternoon, the same law firms filed an additional case in the Florida 11th Circuit Court, which covers Miami-Dade County. They are requesting an expedited trial against Brady and O’Leary, both of whom live in the state, on behalf of Florida resident Bo Yang, who lost money in FTX.
Meanwhile, Bankman-Fried has made a series of bizarre announcements since stepping down as CEO. He claimed that he was still trying to arrange a rescue for the firm, forcing the new CEO, John Ray, to release a statement that “Mr. Bankman-Fried has no ongoing role” at FTX.
Bankman-Fried did an interview with Vox over Twitter DMs, in which he described his public commitment to ethics as a sham, calling it “this dumb game we woke westerners play where we say all the right shibboleths and so everyone likes us.”
He also blasted financial regulators in the interview, which was perhaps not the wisest idea given that FTX reportedly is being probed by the SEC and the Department of Justice.