A growing securities probe against the FTX cryptocurrency fraud is involving Tom Brady, Steph Curry, and others.
For Tom Brady, Steph Curry, and other prominent FTX endorsers, the collapse of the cryptocurrency exchange is becoming possibly the biggest financial story of 2022.
Multiple celebrity endorsers linked to the FTX trading platform are being looked into, according to the director of enforcement for the Texas State Securities Board.
The investigation aims to ascertain whether Brady, Curry, and others broke any securities laws when they promoted FTX and cryptocurrencies."The trading platform's collapse earlier
this month, which includes the freezing of billions of dollars in customer accounts as founder Sam Bankman-Fried filed the business for bankruptcy protection, has drawn the
attention of Texas state regulators. Although different publications have estimated the platform's financial shortfall at $8 billion to $12 billion, or maybe much more,
the overall asset losses by FTX clients are still unknown. Several hedge funds who invested in the platform have already informed investors of probable losses. One of these
hedge funds is venture capital firm Sequoia Capital, which is said to have apologized to its partners this week for projected losses of $150 million related to FTX.
It's still unclear what all of this implies for Brady, Curry, and a large group of other celebrity endorsers. However, Joe Rotunda, the Texas State Securities Board's director of
enforcement, said this week in an interview with Bloomberg that Brady and others who got cash or equity will have their declarations and agreements with the company scrutinized.
What features of the FTX exchange qualify as "securities" and are therefore subject to various securities laws will be at the center of the evaluation for regulators, both state
and federal. In the past, endorsers who commit securities breaches have faced potentially large financial penalties rather than criminal prosecutions and jail time.