How the crypto collapse of FTX hurt Tom Brady and Steph Curry

Sam Bankman-Fried was the golden child of cryptocurrency.

The vibrant company called FTX, which he co-founded, made him worth $15.6 billion – and celebrities wanted in on the profits.

Gisele Bündchen and Tom Brady starred together in a $20 million ad campaign for FTX, receiving a stake in the company along with cryptocurrency in return. NBA legend Steph Curry was made a global ambassador for the company in exchange for a stake and even embroiled his Eat.Learn.Play. charity with the platform. Tennis star Naomi Osaka got a stake. Angels pitcher Shohei Ohtani and Aaron Jones of the Green Bay Packers both signed on as global ambassadors and received equity stakes.

During the 2022 Super Bowl, comedian Larry David starred in a commercial for FTX.

In the ad, which cost a reported $30 million, David listens as an actor playing an FTX executive asks him to invest via the company’s “safe and easy way to get into crypto.” Completely skeptical, a smiling David replies: “Ehhhh, I don’t think so. And I’m never wrong about this—ever.”

Bankman-Fried – and his celebrity friends – should have followed that advice.

Now FTX is at risk of bankruptcy and total collapse, trying to shore up an $8 billion liquidity crisis that has left investors unable to claim their money. The stakes given to celebrities are largely worthless. And the Bankman-Fried empire is facing a federal investigation into whether it mishandled customers’ money.

It’s a massive drop for Bankman-Fried, who, at just 30 years old, was once tipped to be one of the biggest donors to the Democratic Party in the 2024 presidential election.

Now he eats humble pie.

“I got up and should have done better,” Bankman-Fried, who personally lost at least $13 billion on the debacle, tweeted Thursday. “The whole story here is one I’m still working out every detail of, but as a very high level, I’ve upgraded twice.”

Bankman-Fried was raised near Palo Alto, California, by two Stanford Law professors, Joseph Bankman and Barbara Fried. After flipping a coin to choose between MIT and CalTech, he went to Cambridge, Massachusetts, where he studied physics and mathematics.

“Nothing I learned in college ended up being useful … other than, say, social development,” Bankman-Fried told Yahoo Finance. “On the academic side, it’s all useless … School is simply not useful for most jobs.”

So he ended up carving out his own kind of career, via a clever hack in 2017: exploiting a price anomaly that allowed him to buy Bitcoin cheap in Japan and sell it high in other countries. Within 18 months, he had turned $10,000 into $1 billion.

In 2019, with a partner, he launched the FTX crypto exchange, which promised a better and safer way for customers to buy the emerging currency. Customers who bought a “token” from FTX (referred to as an FTT) were allowed to sell crypto at a discount to FTX.

Over the next few years, the boom of the FTX crypto exchange made Bankman-Fried even richer.

And A-list celebrities loved the smell of the excess. Sources told The Post that at least one major Hollywood power player steered celebrities against FTX, believing the crypto exchange was “printing money.”

Even the Miami Heat got involved. The NBA team signed a $135 million deal last year to rename the stadium FTX Arena for the next 19 years.

Meanwhile, Bankman-Fried donated massive amounts of money to politics — including $5 million to Joe Biden’s 2020 presidential campaign. That outpouring made “SBF,” as he’s known among crypto-obsessives, the second-largest donor to the president’s campaign.

According to Politico, during 2022 he contributed $105,000 to conservative candidates and $35,972,000 to liberals. Additionally, he contributed to Protect Our Future PAC, which began as a Democratic political action committee. It launched with $10 million in funding, most of which came from Bankman-Fried.

After publicly expressing a desire to donate “north of $100 million” to the next presidential election, Bankman-Fried later reconsidered, describing her statement as a “stupid quote.”

Democrats made no secret of their love for Bankman-Fried. In 2021, when the crypto guru testified before Congress on the subject of digital assets and the future of finance, Senator Cory Booker couldn’t help but say, “Mr. Bankman-Fried, I’m going to interrupt you because I only have 30 seconds left and I’m offended that you have a much more glorious afro than I once had.”

When it came to his own life, Bankman-Fried lived frugally. Although he could have sailed around the world on a megayacht or flown his own 747, he chose to sleep on a beanbag next to his desk and drive a Toyota Corolla. He reportedly paid himself just 1% of the profits – or about $100,000 per year.

One luxury Bankman-Fried allowed himself was a penthouse in the Bahamas, which he shares with 10 roommates, including FTX co-founder and CTO Gary Wang and FTX director of engineering Nishad Singh.

According to CoinDesk, the others are all FTX employees whom Bankman-Fried met at MIT or while working at trading firm Jane Street — and all 10 “are, or used to be, romantically linked to each other.” Among the group is Caroline Ellison, Bankman-Fried’s on-off girlfriend and CEO of Alameda Research, a cryptocurrency quantitative trading firm founded by Bankman-Fried.

It was smooth sailing for Bankman-Fried until November 2, when crypto publication CoinDesk published some shocking news: Alameda’s balance sheet showed the company had $14.6 billion in assets — and $5.82 billion of those assets were FTT.

No one knows who leaked the document.

“While there is nothing inherently wrong or unfortunate about that, it shows that Bankman-Fried’s trading giant Alameda rests on a foundation that is largely coined by its sister company, not an independent asset like a fiat currency or another crypto,” CoinDesk wrote.

Four days later, the news spurred one of Bankman-Fried’s competitors into action.

Crypto billionaire Changpeng Zhao – known as “CZ” and the owner of rival crypto exchange Binance – announced that he would be dumping $580 million in FTT tokens.

This caused other investors to panic and dump their tokens, leading to a sell-off that saw the price of FTTs drop by 80% in two days.

On Tuesday, Bankman-Fried announced to employees that about $6 billion in cryptocurrency had been withdrawn, and because FTX was heavily leveraged in other investments, it could not make up for those withdrawals.

In other words, disaster.

On Thursday, Bankman-Fried tweeted that his error was a “poor internal labeling of bank-related accounts” that led to a large gap between leverage and liquidity.

“Which tells me a lot of things, both specific and general, that I was s–t about.”

FTX’s collapse has many investors holding the bag.

Several representatives of the big celebrities claim that the stars never invested their own funds in FTX, and only received part of the company as compensation – and therefore only lost “money” on paper. But one banker-turned-tech executive sees it differently: “Suppose every celebrity is invested, but people are too embarrassed to admit it now.”

Miami-Dade County, where the FTX Arena is based, also has egg on its face. A spokesman for the county, which negotiated the transaction, said it is ready to explore “all legal remedies” if FTX cannot meet its financial obligations and is “currently reviewing and gathering information about FTX’s financial situation and possible next steps,” according to to Bloomberg Businessweek.

And Joe Biden has lost a supporter as well.

“He was a big wallet for the Democrats that has now dried up,” crypto investor Brock Pierce told The Post. “He handed out another $55 million [Democratic candidates] for the interim period.”

Financial insiders fear that the collapse of FTX could even trigger a complete meltdown of the US economy.

“We have no idea how far these tentacles extend,” one banker-turned-tech executive told The Post.

“What’s happened with SBF is he’s set the entire crypto industry back about five or 10 years overnight,” Nick Bilton, author of “American Kingpin: The Epic Hunt for the Criminal Mastermind Behind Silk Road,” told The Post. “When crypto first came on the scene, it wasn’t reliable. People lost millions and billions in scams. Then exchanges like FTX and Coinbase came along and crypto had legitimacy.”

“Economy is built on trust,” Bilton added. “When people see someone like Sam igniting billions of money, they pull away.”