Tom Brady and Larry David share more than just a fat bank account.
It appears even some celebrities are not immune to the recent crypto winter, as both Brady and David have recently become embroiled in cryptocurrency-related lawsuits. But first, let’s get you caught up and go back a week.
The amazing implosion of the FTX exchange
If you are unfamiliar with the FTX exchange, up until last week it was the third-largest exchange in the world based on volume. On November 6th, the exchange found itself in crisis mode when rumors began to spread the wildfire that FTX had been allegedly operating a Ponzi scheme. There are a few conflicting stories out right now about how the wildfire got started, but many believe that Binance.com was considering purchasing FTX and noticed irregularities in FTX’s books during due diligence.
Regardless of how the news leaked, it sent customers running to their computers and phones to withdraw their funds from FTX (see also “bank run”) — this caused what can only be referred to as a death spiral as FTX didn’t have the reserves to cover the “run” — in fact, they allegedly didn’t have much of the currency (crypto or not) listed on their balance sheet and were using new money to cover up old money losses.
(The above paragraph is all alleged at this time).
So how do Tom Brady and Larry David fit into all this?
Well if you are unlucky enough to still be exposed to commercials in 2022, you may have noticed a bunch of annoying Crypto ads that were plastered all over your screen during the last bull run. Most of these commercials had smug, annoying celebrities like Matt Damon, Tom Brady, or Larry David telling you to be “bold” or “brave” or “get into the game” or whatever euphemism you want in an attempt to get you to use whatever exchange was paying them for their jester services.
In Brady’s case
He allegedly took his payment in the form of an equity stake, thus making him an owner and complicating things further.
Both Tom Brady and Larry David have “being sued by customer” as something in common
Bigtime, scary lawyers Adam Moskowitz and David Boies have filed a class action lawsuit on behalf of the FTX Customers who are now left scrambling for whatever scraps are leftover from FTX’s bank accounts once secured creditors take their pound of flesh. Brady and David are among some of the celebrities personally named in the suit. Sources are saying that there isn’t much case law on celebrity endorses being named in these types of lawsuits, so it may turn out to be a precedent-setting affair.
It’s too early to tell if FTX customers will be made whole, or if celebs like Brady will personally be on the hook for any damages, but like most news during this crypto winter, this is not the type of headlines us crypto lovers want to see, however if this has a cleansing effect on the industry than it may be worth the sacrifice.
Stay warm crypto friends, it’ll won’t be winter forever! Here take this meme with you:
Tom Brady after his FTX equity stake got zero’d pic.twitter.com/RAXmEzZjAP
— Masa Capital (@MasaSonCap) November 9, 2022