According to recent reports, last year, Taylor Swift, the well-known pop superstar, had turned down a sponsorship deal worth $100 million from FTX. It has been speculated that Swift was the only celebrity to express concerns about the exchange’s compliance with federal financial regulations.
Adam Moskowitz, one of the attorneys leading a class-action lawsuit against FTX and its celebrity endorsers, revealed that Swift had previously raised questions about the promotion of unregistered securities. It is worth noting that earlier Swift’s father had worked for Merrill Lynch, an American financial firm.
Renowned celebrities such Tom Brady and Stephen Curry are currently facing legal action for endorsing the now-defunct crypto exchange.
About the $100 Million Deal
According to sources, last year, FTX and Swift were in talks for a possible $100 million sponsorship deal for her ongoing tour. However, negotiations broke down last spring, despite Bankman-Fried, then-billionaire FTX CEO, being closely involved.
The lawyer representing investors in the civil lawsuit against celebrities who endorsed FTX has suggested that Swift may have been the only potential celebrity endorser to thoroughly review the service’s compliance with federal financial regulations. It appears that Swift’s careful due diligence may have protected her from being sued like other celebrities who supported FTX.
The FTX Implosion
In November of 2022, the FTX cryptocurrency exchange encountered a devastating implosion. This was due to a sequence of tweets that caused investors to panic and withdraw their funds. Unfortunately, FTX was unable to meet the demand due to insufficient funds and as a result, the founder of FTX, Sam Bankman-Fried, was arrested a month later in the Bahamas.
Bankman-Fried is currently facing charges of securities fraud, money laundering, and bribery. If found guilty, he could potentially face a prison sentence of over 100 years. It is worth noting that Taylor Swift’s cautious approach to accepting promotional deals may have saved her from a similar fate. Other notable celebrity endorsers, including supermodel Gisele Bündchen, NBA player Stephen Curry, tennis player Naomi Osaka, baseball player David Ortiz, and Shark Tank’s Kevin O’Leary, must also be mindful of the risks associated with promoting cryptocurrency scams.
Unfortunately, celebrities have faced legal action in the past for failing to disclose payment for endorsing cryptocurrency. Earlier, Kim Kardashian, Floyd Mayweather Jr., and others have also been sued for their involvement in promoting the EthereumMax token.