NFL quarterback Tom Brady and NBA point guard Stephen Curry are reportedly among the celebrities facing an investigation by the Texas financial regulator over their promotion of the now-bankrupt cryptocurrency exchange, FTX.
Joe Rotunda, director of enforcement at the Texas State Securities Board said told Bloomberg in a November 22 report that the Texas State Securities Board is examining payments received by celebrities to endorse FTX US, what disclosures were made and how accessible they were to investors.
Rotunda, however, noted that while the watchdog was “watching them closely”, the celebrities’ endorsements of FTX were not an “immediate priority”, but would be part of the regulator’s “bigger investigation into the collapse of FTX”.
Both Brady and Curry were also named in the Nov. 15 class-action lawsuit against FTX, along with former FTX CEO Sam Bankman-Fried.
The lawsuit alleged that they “supervised, promoted, aided and actively participated” in FTX Trading LTD and West Realm Shires Services Inc.
Others named in the class action include model Gisele Bundchen, the Golden State Warriors basketball team, NBA player Udonis Haslem and Seinfeld co-creator Larry David.
Cointelegraph reached out to the Texas State Securities Board for comment but did not receive a response by the time of publication.
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Past surveys have found that nearly half of retail investors will follow digital asset advice from the social media accounts of celebrities and influencers without question, and this has seen more than a few use their influence to hype crypto products and projects.
In October, reality TV star Kim Kardashian was fined by the US Securities and Exchange Commission (SEC) for “publicizing on social media” about the EMAX without disclosing that she was paid $250,000 to post about it.
Kardashian neither admitted nor denied the SEC’s allegations, but settled the allegations and agreed not to promote any crypto assets until 2025.