Thursday, June 13, 2024

Tom Brady, Steph Curry and Kevin O’Leary set to lose big from FTX bankruptcy filing

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Former FTX CEO Sam Bankman-Fried lost his entire $16 billion fortune in just a few days after his company filed chapter 11 bankruptcy protection on Friday, but he’s not the only high-profile investor who may lose money amid FTX’s downturn.

As interest in crypto and crypto exchanges exploded in recent years, more high profile individuals like professional athletes and other entertainment personalities joined financial institutions in investing in FTX.

One of those athletes is Tampa Bay Buccaneers quarterback Tom Brady.

Just a few months after winning his seventh Super Bowl in 2021, Brady and his then-wife Gisele Bündchen were each given equity stake in FTX, in addition to receiving some crypto. Brady served as an ambassador for the company and Bündchen was FTX’s Environmental & Social Initiatives Advisor. The two also starred in several TV commercials for FTX.

“It’s an incredibly exciting time in the crypto-world and Sam and the revolutionary FTX team continue to open my eyes to the endless possibilities,” Brady said in 2021. “This particular opportunity showed us the importance of educating people about the power of crypto while simultaneously giving back to our communities and planet. We have the chance to create something really special here, and I can’t wait to see what we’re able to do together.”

It’s not clear how much equity Brady and Bündchen received in 2021, but FTX raised capital at a $32 billion valuation a few months after the announcement of the deal.

See also: FTX filed for Chapter 11 bankruptcy. Here’s what account holders should know about this ‘very messy and complex bankruptcy case’

A similar story can be told for Steph Curry of the NBA champion Golden State Warriors, who was made a global ambassador for FTX and also given an equity stake in the company in 2021.

It’s unclear what will happen to the money investors put into in FTX, but their equity could be wiped out by the bankruptcy filing.

Representatives for Curry, Brady, Bündchen and FTX did not respond to MarketWatch’s request for comment on this story.

Other high-profile investors in FTX were Jacksonville Jaguars quarterback Trevor Lawrence, MLB’s Shohei Ohtani, tennis star Naomi Osaka and Sharktank’s Kevin O’Leary.

Additionally, Major League Baseball has a marketing deal with FTX where umpires where an FTX logo on their shirts during games, and the NBA’s Miami Heat renamed their home stadium “FTX Arena” back in 2021. Unlike announcements for the athletes listed above, the press releases for the MLB and Heat did not include mention of an equity stake in FTX.

According to a list compiled by the New York Times, financial groups that backed FTX include: Third Point Ventures, Tiger Global, Sequoia Capital, SoftBank 9984, +1.76% and BlackRock BLK, +1.97%.

FTX paused withdrawals earlier this week amid a multibillion liquidity crunch. At one point, rival crypto exchange Binance was interested in a takeover of FTX, but decided against the move and called FTX’s financial problems “beyond our control or ability to help.”

See also: You need to understand the FTX debacle even if you have no investments in crypto

“There’s celebrity CEOs in this space as well as celebrity crypto entrepreneurs,” SEC chairman Gary Gensler said on CNBC this week after news broke of FTX’s liquidity issues but prior to the bankruptcy announcement. “The public can fall prey to their promotions, their marketing and the like.”

In a viral Twitter thread on Friday, Bankman-Fried apologized for FTX’s recent situation. “I’m really sorry, again, that we ended up here,” he said. “Hopefully things can find a way to recover.”

Bitcoin BTCUSD, +0.20% prices briefly dropped to their lowest level in two years this week, and the price for ether ETHUSD, +0.09%  is down 73.22% over the last year.

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