The collapse and bankruptcy of cryptocurrency platform FTX has been one of the biggest stories of 2022 and will undoubtedly have more ripple effects going forward. Along with impacting many cryptocurrency holders and investors, several athletes and celebrities are impacted and are now part of a lawsuit.
What Happened: On Tuesday, a class action lawsuit was filed alleging Tom Brady, Steph Curry, Gisele Bündchen, Larry David and others misled customers on the safety of FTX and cost them billions of dollars.
Sports business reporter Darren Rovell of Action Network told Benzinga he was unsurprised but the lawsuit, but doesn’t see a lot of potential risk to Brady and others.
Endorsements are often well vetted and athletes are told what they can and can’t say, Rovell said.
On Wednesday, Rovell wrote about the history of athletes being sued and used examples like golfer Vijay Singh being sued over advertiser Stanford International Bank, a Ponzi scheme.
The lawsuit was halted as parties that advertised Stanford Bank were found not to be liable.
In 2011, athletes were sued over their advertising of Power Balance. Athletes including Drew Brees, Clay Matthews and Darren Sproles were sued but did not have to pay anything in the lawsuit.
Rovell said athletes are rarely found liable for advertising products and only when they don’t disclose investments or the FDA, FTC or SEC get involved do cases usually go somewhere.
“Maybe the only thing Curry and Brady have as far as words is it’s the safest way for you to save or get your crypto,” Rovell told Benzinga.
Rovell said this is disputable but not patently false, and Brady and Curry likely had no idea on how bad things were within FTX.
“The whole asset class going down in flames, exchanges — it’s not like FTX is the only one. It weakens the case.”
One interesting item in the lawsuit that Rovell highlighted is Brady deleting at least one tweet related to FTX and changing his profile picture away from one with laser eyes that supports Bitcoin, which Benzinga reported on earlier this week.
“It makes it like there is some sort of guilt involved when you start deleting tweets.”
Rovell said the tweet deletion and profile picture change show that Brady’s team are aware of what’s going on and working on the perception of the NFL star.
Related Link: Tom Brady, Gisele Bundchen Could Be Left In Hot Water As FTX Struggles To Survive
What’s Next: Rovell doesn’t expect Brady or Curry to publicly talk about FTX.
“I don’t think they’re gonna say anything,” Rovell said.
Rovell also doesn’t think the FTX collapse and lawsuit will be a big distraction for Brady.
“He’s got enough distractions. [The] divorce and family part of it is enough distraction.”
Rovell said he was surprised when Curry and Brady did deals with FTX given the inherent risks that come with cryptocurrency.
“I was actually surprised when Brady did this deal and didn’t feel like he needed it, no matter what the payout was.”
The Golden State Warriors, which were also named in the lawsuit, distanced themselves from FTX by pausing promotions this week. When asked if sports teams or leagues will be more cautious with cryptocurrency deals going forward, Rovell said “money is always tempting.”
“I would like to say they would be more cautious, but they haven’t been.”
Crypto Price Action: Bitcoin BTC/USD is trading flat Thursday at $16,654.37.
Ethereum ETH/USDis down 0.4% to $1,201.40 on Thursday.
The FTX Token FTT/USD is down 2% to $1.55 on Thursday.
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Photo via Shutterstock.
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