Steph Curry of the Golden State Warriors, Tom Brady of the Tampa Bay Buccaneers, and a host of other famous people who promoted FTX are being investigated for breaking the securities law of Texas.
According to the Texas State Securities Board director of enforcement Joe Rotunda, the promotion of the exchange by the two famous players may have broken the state’s regulations governing reporting of FTX facilitated transactions. Rotunda stated that his office is looking into them noting in particular what disclosures were provided and if they were available to ordinary investors.
Although Sam Bankman-Fried, the former CEO of FTX leveraged high-profile celebrities and athletes, including Brady and Gisele Bundchen, his ex-wife to draw consumers to the exchange, the two also acquired stock shares in the company.
Brady was shown utilizing a flamethrower on an ice block in one of the segments, which were unusual for FTX.
The two, along with Curry, Shaquille O’Neal, among endorsers, are in the middle of a legal battle as a class action lawsuit filed against them in the Miami Federal Court claims that said endorses had a hand in promoting digital currencies which are essentially unregistered securities, making it illegal. The Securities and Exchange Commission (SEC) has claimed that virtually all cryptocurrencies are securities, a claim that the majority of the crypto industry categorically denies as there are a multitude of categories that crypto can belong to.
Shohei Ohtani, Naomi Osaka, and Larry David were all joined by Sam Bankman-Fried for his $6.5 million advertisement in the Super Bowl. They were also joined by Naomi Osaka, a tennis pro. Additionally, SBF spent $210 million for the endorsement of an e-sports team and spent $135 million for the naming rights to the Miami Heat’s arena in the National Basketball Association – NBA.
Celebrity cryptocurrency promoters have received accusations from securities regulators before, so this is nothing new.
Kim Kardashian and the SEC negotiated a $1.26 million settlement last month for her failure to report that she had received $250,000 in exchange for endorsing EthereumMax, along with a $1 million fine. Anti-touting regulations forced her to submit a more thorough disclaimer, stating how much she was paid, even though she used the hashtag “#ad” on the post on instagram.
However, Kim Kardashian and other famous people who were compelled by the SEC to reach settlements, such as Steven Seagal as well as Floyd Mayweather, were promoting specific cryptocurrencies rather than an exchange where users might purchase said cryptocurrencies.