Tampa Bay Buccaneers quarterback Tom Brady and the Golden State Warriors’ Steph Curry are among the celebrities that a Texas regulator is investigating for potential securities-law violations tied to their promotions of crypto exchange FTX.
The regulator is scrutinizing payments received by the celebrities to endorse FTX US, along with what disclosures were made and how accessible they were to retail investors, Joe Rotunda, director of enforcement at the Texas State Securities Board, told Bloomberg News in an interview.
“We are taking a close look at them,” Rotunda said. Though the stars’ endorsements aren’t the most immediate priority, they’re still a focus in the regulator’s larger probe into FTX’s collapse, he said.
For celebrities, FTX might be the loudest lesson yet on the reputational, legal and regulatory risks of hyping crypto. Even before the collapse, the US Securities and Exchange Commission was cracking down on plugs without proper disclosures. The Texas probe serves as a reminder that state securities laws might also apply.