How Tom Brady's Crypto Ambitions Collide With Reality

When cryptocurrency exchange FTX exploded last fall, Tom Brady, the seven-time Super Bowl-winning quarterback, made an emergency phone call.

He called Sina Nader, head of partnerships at FTX. Exchange staff are in the middle of a crisis meeting with its beleaguered founder, Sam Bankman-Fried. Mr. Nader could not answer. “I never expected to turn down a call from Tom Brady,” he said.

Mr. Brady has reason to be concerned. As an “ambassador” for FTX, he appeared at the company's conferences in the Bahamas and on TV advertisement which promotes exchange as “most trusted” institutions in the loosely regulated crypto world.

The money is also at stake. As part of the support agreement that Mr. Brady signed in 2021, FTX has paid him $30 million, a deal made up almost entirely of FTX stock, three people familiar with the contract said. Mr 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 Mr Bankman-Fried faces criminal fraud charges. Mr Brady, 45, and Ms Bündchen, 42, have been sued by a group of FTX customers seeking compensation from celebrities who supported the exchange. On top of that, 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 shares, said two people familiar with the endorsement deal.

Their situation is the highest profile example of the shameful reckoning facing actors, athletes, and other celebrities who rush into the easy money and online cryptocurrency hype. During boom times, Paris Hilton, Snoop Dogg, Reese Witherspoon, and Matt Damon all talked about or invested in crypto projects, bringing mainstream audiences into the skewed world of digital currencies. It's fun – and profitable – while prices soar.

But last year's crash put an end to celebrity crypto profits.

In October, the Securities and Exchange Commission ordered Kim Kardashian to pay $1.26 million for failing to make adequate disclosures when she backed the EthereumMax crypto token. In December, a lawyer in California sued two crypto firms, MoonPay and Yuga Labs, accusing them of using their “extensive network of A-list celebrity musicians, athletes and 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, the server process submit court papers to Shaquille O'Neal, the retired basketball star, who is being sued for promoting FTX, according to legal filings. Mr. O'Neal was served on the broadcast of a National Basketball Association playoff game.

Representatives for Mr Brady, Mr Bankman-Fried and MoonPay declined to comment. A spokesman for Yuga Labs said the company had “never paid a celebrity to join a club.” Representative Ms. Bündchen and Mr. O'Neal did not respond to requests for comment.

Tech startups and celebrities have long had a symbiotic relationship. Start-ups offer stars a way to make money while staying on the cutting edge of internet culture; celebrities help young companies gain credibility and reach a larger audience.

Of all the start-ups recruiting celebrities to support crypto, FTX is perhaps the most passionate. As Mr. Bankman-Fried was trying to turn FTX into a household name, he created a list of celebrities he envisioned promoting the company, recalls Mr. Nader, a former FTX executive. Mr. Brady's name is on top.

A former college football player, Mr. Nader is tasked with recruiting Mr. Brady and other stars. In June 2021, Mr. Brady and Ms. Bündchen agreed to the deal with Mr. Bankman-Fried, praising the “revolutionary FTX team”. Mr. Brady seems genuinely interested in crypto, says Mr. Nader, and occasionally talks to Mr. Bankman-Fried.

“Imagine a tiger and a lion talking,” said Mr. Nader. “They're a little different, they do different things, but they're really tough in their own arena.”

In 2021, Mr. Brady also co-founded Autograph, which helps famous people sell crypto collectibles known as nonfungible tokens, or NFTs. Autograph raised over $200 million from investors, and Mr. Bankman-Fried joins the board.

In the same year, Mr. Brady and Ms. Bündchen starry in a $20 million ad campaign for FTX, with ads running during NFL games. Mr. Brady also posted TikTok videos with Mr. Bankman-Fried from FTX's headquarters in the Bahamas, where he spoke at a conference in front of hundreds of people. Backstage Mr Bankman-Fried said he could imagine buying a football team one day with Mr Brady. Ms. Bündchen also appeared at the conference as head of FTX's environmental and social initiatives.

When FTX collapsed last November, the company's valuation was $32 billion — including $48 million in Mr. Brady and Ms. Bündchen — dropped to zero. The pair had also accepted small amounts of Ethereum, Bitcoin and Solana tokens to trade on the platform, said one of the people, who disappeared in the FTX bankruptcy.

Mr Brady has not commented publicly on FTX or his relationship with Mr Bankman-Fried. After the FTX crisis meeting in November, Mr. Nader called her back.

“He was worried,” said Mr. Nader. “The first thing he asked me was: ‘Sina, how are you? I know you put your heart and soul into this.'”

Ms. Bündchen said in March interview with Vanity Fair that she had “believed the hype” and felt “blinded out”.

Crypto venture Mr. The other Bradys are also having a hard time. Autograph's revenue slumped last year amid the crypto crash, said a person familiar with its finances. The start-up has changed its strategy to focus more on helping celebrities find ways to grow loyalty with their fans, and less on marketing crypto tokens to consumers, the person said. The company has also removed some crypto language from its marketing, disparaging terms like NFTs, said another person familiar with the company.

Autograph has also cut more than 50 employees in the round of layoffs, a third person said. The reduction was previously reported by Insiders. An Autograph spokesperson declined to comment.

Mr. Brady is also facing legal troubles. In December, lawyers Adam Moskowitz and law firm Boies Schiller Flexner filed a lawsuit in federal court in Florida alleging he and Ms. Bündchen misleads investors. Among the other defendants are comedian Larry David, NBA star Steph Curry and tennis player Naomi Osaka, all of whom support FTX.

“Neither of these defendants exercised due diligence prior to marketing these FTX products to the public,” the lawsuit states.

Some celebrities have barely escaped from the crypto mess. Pop star Katy Perry held talks about a partnership with FTX that never came to fruition, said three people familiar with the situation.

In spring last year, Taylor Swift discussed a deal with FTX that could pay as much as $100 million, two people familiar with the matter said. Tour sponsors are on the table after Ms. Swift declined other promotion options, said a person with knowledge of the talks. The deal size was previously reported by Finance Time.

Mr. Moskowitz he said on the podcast in April that Ms Swift had done her due diligence on FTX, asking the exchange to prove its cryptocurrency was not an unregistered security. the comments caused a flurry of headlines about Ms.'s business acumen. swifts. But in an interview with The New York Times, Mr. Moskowitz said he had no inside information about the talks.

In fact, Ms. Swift signed a sponsorship deal with FTX after more than six months of discussions, said three people familiar with the deal, and Mr. It was Bankman-Fried who withdrew. A last-minute reversal left Ms. Swift was frustrated and disappointed, two people said.

A spokesperson for Ms. Swift declined to comment.