Sam Bankman-Fried, the Crypto King, was convicted of seven counts of fraud and conspiracy on Thursday night, after the jury deliberated for just a few hours. Despite the conviction, the legal troubles for those involved in FTX are far from over.
During Bankman-Fried’s trial, former FTX executive Nishad Singh testified that he felt as though the company’s spending on celebrity endorsements was excessive. It’s thought that around $1 billion was spent on marketing by the exchange.
This frivolity arguably peaked with its February 2022 Super Bowl ad spend in what became known as the ‘crypto bowl,’ infamously the commercials featured Larry David paying a historical character who makes a series of incorrect predictions culminating in him saying that he didn’t think FTX was a good investment.
Earlier this month, Singh testified that the company’s venture investments and $1.1 billion in planned marketing deals, including naming rights to the arena where the NBA’s Miami Heat play and featuring NFL quarterback Tom Brady in commercials, ‘reeked of excess and flashiness.’
In a separate lawsuit regarding FTX’s spending, it’s alleged that a Bankman-Fried-controlled shell company used $214 million in FTX funds to buy a stake in celebrity Kendall Jenner‘s 818 Tequila brand at a time when the tequila company’s assets were valued at just $2.94 million.
Numerous A-list celebrities are still facing a major lawsuit following Sam Bankman-Fried’s conviction on fraud charges, here he is pictured with Gisele at a conference in 2022
Tennis star Naomi Osaka said in her commercial: ‘I’m proud to partner with FTX. Making cryptocurrency accessible is a goal that FTX and I striving towards’
Brady was filmed at home calling around his friends to sign them up with FTX. The company marketed the ad campaign with the slogan: ‘Tom Brady is in. Are you?’
Sam Bankman-Fried stands as the jury foreperson reads the verdict after in his fraud trial on Thursday
Singh also said in his testimony that FTX was put in touch with many stars through the investment firm K5, which Bankman-Fried described as a ‘one-stop shop’ for brokering relationships with celebrities.
It was earlier reported that FTX executives concocted a plot to get close to celebs by allowing agents to buy into the company for relatively low prices.
The Financial Times reported that there was minimum floor for investors but that agents were allowed to buy in to the brand for fees as low as $25,000 and $50,000.
A former employee told the newspaper, ‘Sam granted people from the big agencies an opportunity to throw in like employees.’
Retired NFL star Brady and Gisele, his supermodel ex-wife, are named in the suit as FTX ambassadors who ‘joined the company’s $20-million ad campaign in 2021’ and starred in a commercial ‘showing them telling acquaintances to join the FTX platform’.
Gisele told Vanity Fair: ‘I was blindsided. I’m no different than everyone else that trusted the hype… It’s just…terrible. I’m so sorry for all of us that this happened, and I just pray that justice gets made.’
The former Victoria’s Secret model also shifted the blame on to her financial advisors who made FTX sound like a ‘great thing.’
During their relationship with FTX, Brady recorded TikToks with Bankman-Fried and the pair even hosted a talk together at a crypto conference named Winning.
Author Michael Lewis told 60 Minutes in October: ‘[Brady] really liked him and he really liked the hope that he brought,. As time has gone by and he’s ceased to get a really good explanation about what’s happened, I think [Brady] is just like, “He tricked me. I’m angry. I don’t want to have anything to do with it anymore.”‘
Bankman-Fried pictured in conversation with Clinton and Blair in April 2022
SBF was gleeful as he met celebrities and former world leaders at a Crypto Bahamas reception
Bundchen looked glamorous on stage with Sam Bankman-Fried at the Crypto Bahamas event. The FTX chief looked awkward as he opted for his usual outfit of scruffy shorts and t-shirt
Steph Curry’s advert showed him telling viewers: ‘I’m not an expert and I don’t need to be, with FTX I have everything I need to buy, sell, and trade crypto safely.’
Shaquille O’Neal also appeared in an FTX commercial
In total the couple is thought to have lost nearly $50 million in their investment in FTX, The New York Times reported in July.
Despite that, the former couple may still have to pay tax on the investment.
Other celebrities who lost money included Shark Tank star Kevin O’Leary, who lost a total of $11 million investing in the exchange. He told CNBC’s Squak Box in in December 2022 that he was paid $15 million to be a spokesperson for the company.
While it’s estimated that Tom Brady’s former boss, Patriots owner Robert Kraft, lost ‘eight figures’ through his investment.
Golden State Warriors legend Curry is singled out in the class action suit for appearing in an ad campaign in which he said he didn’t need to be an expert in crypto because ‘with FTX I have everything I need to buy, sell, and trade crypto safely’.
David appeared in a Super Bowl commercial for FTX which showed him portraying a series of clueless characters as they reject bright ideas through history, including the toilet and the lightbulb.
The ad then showed David reject FTX, before a message appears: ‘Don’t be like Larry.’
Shaquille O’Neal also appeared in an FTX commercial, as did Steph Curry. Osaka was an ‘ambassador’ for the company.
In April 2022, former President Bill Clinton joined former UK Prime Minister Tony Blair at a $3,000-a-head crypto event in The Bahamas alongside Bankman-Fried.
Also in a attendance was Lord of the Rings star Orlando Bloom and songstress Katy Perry.
The talk between Bankman-Fried, Clinton and Blair was held ‘off the record’, but some details have trickled out.
As the two world leaders donned suits beside a typically-scruffy Bankman-Fried, Blair was said to have joked: ‘I’m feeling a little overdressed.’
Clinton declared crypto ‘obviously serious’ and warned of the ‘temptation to abuse’ such nascent technologies, adding: ‘You want to do right by it in the regulatory space.’
In the audience, guests lounged on beanbags laid out over a faux beach at the edge of the stage.
That night, a VIP ‘Island Party’ was followed by a closing party which ran until at least 2am.
Steve Aoki, one of the world’s highest-earning DJs, performed a raucous set with former One Direction star Liam Payne.
The pair went shirtless as they hyped up the crowd. Aoki captioned an Insta post about the bash: ‘Threw it down in Bahamas for the crypto heads!’
Earlier on, Aoki and Payne (shirts on) had posed for pictures with Blair at a Crypto Bahamas reception event.
It’s not clear whether Blair was paid for the event, or how much. A spokesman told DailyMail.com on Monday: ‘Tony Blair did an event for FTX organized through his speakers’ organization and that is all.’
Neither Blair nor Clinton are mentioned in the class action lawsuit being brought by FTX investors
On Thursday, Bankman-Fried hit rock bottom when a New York jury convicted him of fraud for stealing at least $10 billion from customers and investors.
After the month long trial, jurors rejected Bankman-Fried’s claim during testimony in Manhattan federal court that he never committed fraud or meant to cheat customers before FTX, once the world’s second-largest crypto exchange, collapsed into bankruptcy a year ago.
‘Mr. Bankman-Fried. Please rise and face the jury,’ Judge Lewis A. Kaplan commanded just before a jury forewoman responded ‘guilty’ seven times to two counts of wire fraud, two counts of wire fraud conspiracy and three other conspiracy charges, which carry potential penalties adding up to 110 years in prison.
Bankman-Fried is likely to face far less than the maximum at a sentencing set for March 28.