Redbord, Ari. “Tom Brady and Other A-Listers Sued for Fumbling FTX Endorsements.” Forbes, www.forbes.com/sites/ariredbord/2023/02/01/tom-brady-and-other-a-listers-fumble-ftx-endorsements-but-will-they-be-held-liable/?sh=42c425157d8c.

Summary.

In this Forbes article written by Ari Redbord,  the Head of Legal

and Government Affairs at TRM Labs, a blockchain intelligence

company. Former Senior Advisor to the Deputy Secretary and

the Undersecretary for Terrorism and Financial Intelligence at

the United States Treasury. Redbord dives into the endorsements superstar celebrities made to the cryptocurrency exchange FTX in December of 2022. In the wake of the crypto exchange collapse.

According to Ari Rebord, “Lawyers filed a class action lawsuit against former FTX CEO Sam Bankman-Fried and a host of celebrities like Brady and David.” And added later in another paragraph “These celebrity endorsers include supermodel Gisele Bündchen, NBA star Stephen Curry, tennis phenom Naomi Osaka, former baseball superstar David “Big Papi” Ortiz, and Shark Tank’s Kevin O’Leary. They are all implicated for appearing in paid advertising campaigns and endorsing the exchange.”

This showcases how diverse these celebrities are. We have athletes from basketball, football, tennis, to supermodels, and well-known investors.

These celebrities have a very large audience and fans who support their endeavors. So let’s put into perspective how much impact an endorsement like this had on their audience and their economics.

In words by Redbord, “The complaint specifically argues that FTX’s customers, through engaging with the FTX platform, were buying and selling “unregistered securities,” regulated by the Securities Exchange Commission (SEC). Therefore, Brady and the other celebrity endorsers were required to reveal the details of their financial agreements with FTX.” These celebrities had no idea, or what they were promoting but took their large sums of checks and smile on their face.

As mentioned by Redbord “It could also set a precedent for celebrities being legally responsible for the products and services they endorse. Let’s break down this argument based on the legal precedent that already exists today.”

But this was not the only cryptocurrency that fumbled and had been endorsed by celebrities. Later on in his article Redbord adds “In December 2022, a federal judge in California dismissed a lawsuit from investors accusing Kim Kardashian, boxer Floyd Mayweather Jr. and others of endorsing a cryptocurrency known as EthereumMax (EMAX).”

Many more celebrities endorse other cryptocurrencies just to make extra money, in my opinion out of greed. Without having a single clue of what they were attaching their names to. Thankfully this case did make celebrities pay fines for their misinformation. But that’s not enough many people put their funds into these cryptos thinking it was going to change their lives, even if they had no understanding of what it was. And never received any of their money.

Reflection and Analysis.

Celebrities have so much influence over the masses who idolize them, as they find them successful. But a lot of time were opportunities to multiply their funds and their wealth. They will take it without educating themselves in order to fully understand what they’re marketing to their audiences. As we read in this article lots of their audience money was lost and these celebrities were not held accountable by the law.

These celebrities paid fines that just nicked their wealth but what about the lives of their fans who believed in their word, were clueless, and invested large sums of their wealth to hopefully live a better life?

The government dropped the class actions. And there was no accountability for what they endorsed.

As I mentioned in my summary the niches that the celebrities touched were all over the place! We have athletes in football, basketball, and tennis. It also includes supermodels and celebrities well-known for investing. Around 15 million people felt enough trust from these endorsements that the cryptocurrency exchange mishandled $8 billion in customer deposits.

All the celebrities paid fines for the lack of disclosure to the audiences.

But it will never return the money “invested” to those who believed in the cryptocurrency exchange. I believe Sam Bankman-Fried was very clever for using paying celebrities to endorse his project since the results backed the idea that consumers will trust celebrities and their actions.

Consumers are naive as they see celebrities as “new age gods”.

And not realizing that their just consumers, a tool that they can work in order to gain any leverage. Taking on opportunities to maximize their wealth without taking into consideration the responsibility that comes with endorsing lifestyles, products, and other services without fully understanding how it will affect their audiences as long as they’re profiting.