Long before cryptocurrency exchange FTX went bankrupt and platform founder and CEO Sam Bankman Freed was arrested, the company’s investors included some of the world’s biggest talent agencies and their celebrity clients.
According to the Financial Times, many high-profile figures have taken stakes in deals to facilitate the exchange of Fried, who is now accused of a range of financial crimes, including fraud, collusion and money laundering.
These agencies acted as intermediaries with celebrities. Investors and celebrities promoting crypto services represented by the FT include American football player Tom Brady, basketball star Steph Curry and comedian Larry David. The allure of these “stars” boosted FTX’s popularity, giving it global exposure before its sudden collapse and bankruptcy at the end of 2022. The list also includes tennis player Naomi Osaka and model Gisele Bündchen.
Court documents cited by the Financial Times reveal FTX’s network of personal and financial relationships with celebrities and talent agencies that represented some of FTX’s top promoters and bought the group’s stock. FTX’s advertisers played a critical role in the company’s rise and fall, but there are few reports of their financial dealings with the celebrity intermediaries.
Preferential treatment for well-known investors
FTX usually required a minimum threshold from investors willing to buy its shares, but the company allowed agencies to buy smaller blocks of shares, a lucrative arrangement for only a select group of potential investors, including employees of the company.
“Usually, Sam would not allow anyone other than employees to invest $25,000 or $50,000,” said a former FTX employee with direct knowledge of the deals. “Sam gave people from big agencies the opportunity to invest as employees,” he adds.
In the summer of 2021, FTX tried to attract celebrity investors and declared itself the “largest cryptocurrency exchange outside of China” in an 11-page report sent out to potential investors.
The exchange announced an estimated profit of $800 million for 2021, saying that trading volume increased 75.2 times from January 2020 to May 2021.
FTX’s statements about its finances, which are currently being reviewed by the US Securities and Exchange Commission as part of a wide-ranging fraud investigation, have attracted the agencies and their high-profile clients.
As with other shareholders, the money that agents, celebrities and athletes invested in FTX likely evaporated after the company went bankrupt.
Financial Times source
Source: Kathimerini
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