Cryptocurrency investors last week filed a lawsuit in Florida state court against Tom Brady, accusing the Buccaneers quarterback and baseball Hall of Famer David Ortiz of duping consumers when they backed now bankrupt digital money platform FTX. The lawsuit also named former FTX executives.
The litigation joins a similar federal lawsuit against several athletes who endorsed FTX, including Brady and Ortiz, and a different one aimed at Mark Cuban and the Dallas Mavericks for alleged transgressions related to the team’s sponsorship deal with failed crypto firm Voyager.
These lawsuits raise the question of what culpability celebrity endorsers have for touting a financial product that fails. Could Brady and his peers actually be on the hook for losses as the cryptocurrency ecosystem appears to implode?
Certainly not if a ruling in a case brought against Floyd Mayweather, Kim Kardashian and basketball Hall of Famer Paul Pierce is any indication. In dismissing a lawsuit alleging their promotion of failed cryptocurrency Ethereum Max was a fraud, federal judge Michael Fitzgerald wrote last week, “The Court acknowledges that this action raises legitimate concerns over celebrities’ ability to readily persuade millions of undiscerning followers to buy snake oil with unprecedented ease and reach. But, while the law certainly places limits on those advertisers, it also expects investors to act reasonably before basing their bets on the zeitgeist of the moment.” He is allowing the…
