Celebrity Casualties Of The FTX Collapse: Brady, Gisele, Larry David, & More

The FTX collapse saw an exchange that was once valued at $32 billion die a quick death in November 2022, taking billions in customer funds with it. FTX founder Sam Bankman-Fried had leaned heavily on celebrities to endorse and promote his platform, with the subsequent fallout damaging both their net worths and reputations. Class actions, financial losses, and reputational damage were components of a perfect storm that will make all those on the receiving end think twice about lending their name to similar ventures in the future.

Tom Brady and Gisele Bündchen: An FTX Nightmare For A One-Time Power Couple

They may be divorced now, but they were brand ambassadors back in 2021, appearing in prominent Super Bowl commercials, and constantly popping up in other promotional campaigns. They also took equity stakes in FTX, resulting in losses that would have been far larger than if they had simply been paid for their services and invested their earnings with the company.

Although precise accounts have not been made public, experts estimate that their combined stake in FTX was worth as much as $70 million at its peak valuation. Today, it is worthless, as well as a cautionary tale of the importance of due diligence, especially when it comes to emerging markets. With their divorce being finalized a matter of weeks before FTX ultimately collapsed, the stress on both parties would have been something they could have certainly done without. That’s before the legal complications of splitting assets from a failed company.

In 2026, they both stand accused of promoting unregistered securities by multiple parties in class actions that look set to make the headlines for years to come. The allegations, simply put, are that both Gisele and Brady added credibility to something they should have known was not what it appeared to be, exposing investors and users to unfair risk in the process. You only have to look at social media for clips and memes of Brady awkwardly explaining crypto to his friends in commercials before the collapse to get a sense of the reputational damage.

Larry David's Super Bowl Ad Backfires

Larry David's infamous February 2022 Super Bowl commercial put FTX front and center with the comedy megastar, who has made a career of being a curmudgeon, talking bad about everything from the wheel to the lightbulb. When he dismissed FTX, too, a "Don't be like Larry" tagline appeared on the screen. The joke was supposed to be at his character’s expense (the comedian was paid millions), but it ultimately turned out to be on the investors, many of whom lost everything. David finds himself named in a $11 billion class action lawsuit, with the typically vocal funnyman remaining uncharacteristically quiet ever since.

Cautionary Tales Of Athletes Who Went All-In On FTX

Shaquille O'Neal took up a lucrative position as an FTX ambassador, promoting it to his millions of social media followers and fans, while adding credibility as he is known to be a savvy investor. Early investments in Ring and Google stand out, which makes his mistake with FTX all the more spectacular. He even went viral for his attempts to avoid being served with legal papers and took what seemed like an age to even admit to being named in the ensuing lawsuit. Given that he is thought to have received an equity stake, his losses may run into the tens of millions.

Tennis star Naomi Osaka was hired as an ambassador to promote FTX to the tech-savvy Japanese market, and is thought to have lost up to $10 million through a now worthless equity stake. The sportswoman has been vocal about everything from toxic social media to women’s rights in the post-match interview room, so it is notable that she has chosen to remain completely silent on the thorny issue of FTX’s collapse.

The star rookie in the NFL, Trevor Lawrence, put so much faith in the FTX revolution that he publicly shared he had converted his signing bonus into crypto by using the exchange. Not only has this aged incredibly badly, but he also signed on with FTX right near the very top of the market. His ability to put the right people around him outside of the football field has been questioned ever since.

Other Celebrity Casualties You Need To Know About

Take a look at this quick list, and you soon see that the issue is one that has touched almost every area of professional sports and celebrity culture:

- Steph Curry’s protection of his personal brand is well-known, so it’s surprising he took such an uninformed risk that now sees him named in several class actions.

- Trevor Noah used "The Daily Show" and his social channels to promote FTX, only to find himself named in several lawsuits. Unlike the sports stars on this list, the comedian makes reference to the collapse in some of his new material.

- Kevin O'Leary is a fan favorite on "Shark Tank" and was paid $15 million to be an FTX spokesperson, going as far as to call the now-imprisoned Sam Bankman-Fried a "modern-day J.P. Morgan" in a series of interviews. The collapse has been particularly damaging for a man who came to public attention for his business acumen.

- David Ortiz, the Boston Red Sox legend, endorsed FTX in commercials that were mainly produced to hit the Latino market. Today, he remains silent on the issue despite being named in lawsuits.

We could have added dozens of others to this list, but this shortened version serves to illustrate the key point: public figures lent their name to something they had little or no understanding of. While all will no doubt plead ignorance rather than malice, the result is still that millions have lost considerable amounts of money.

The Legal Fallout & The Issue Of Responsibility

A class action suit allows thousands of people to take action against the same group of celebrities, potentially strengthening their case in the process. While they argue that the celebrities didn’t properly disclose their positions and vested interests, the celebrities are arguing that they are also victims of the FTX fraud.

SEC regulations state that all endorsements must be declared, which is what led to Kim Kardashian having to pay a $1.26 million fine in 2022 when promoting another crypto scheme without properly declaring her vested interest. In addition to private suits, it is possible that the celebrities named in the FTX suits will face SEC fines similar to those of the most famous of the Kardashians.

History shows that many of the celebrities will look to make settlements or to seek leniency in return for enhanced testimony, but the reputation damage has already been done. For this reason, it’s reasonable to expect those in the public eye to be far more cautious about lending their name to similar ventures in the future.

Will Celebrities Continue To Promote Crypto?

A-listers are now hiring legal teams that are demanding full disclosure, equity research, and liability protections before they agree to lend their name to any new venture. Because many are now aware that when fraud is backed by venture capital money, it can look legitimate. Regular people are also more aware than ever that something being endorsed by their favorite player or comedian means largely nothing about the integrity of the offer. All of this means that a more critical eye is being applied by celebrities and the general public. As a result, websites like CryptoSpinners that may be looking for ambassadors will face far more questions during the initial feeling-out period than FTX ever did.

FTX Should Be Seen As A Warning From History

The FTX collapse is a prime example of what happens when hype, celebrity, and fast money all combine without anyone checking for signs of fraud. Because of the complex nature of equity valuations and the huge number of personal investments, the total losses may never be known, but the reputational damage has been done. Whether this is enough to deter the world from jumping on the next hype train remains to be seen.