FTX Ltd., the world’s second largest crypto company, was seen as a trustworthy, stable bet in the industry. Its near-collapse is having ripple effects through the crypto sector at alarming speed, with the price of Bitcoin and Ether plummeting more than 20 per cent over a week.
The FTX crash is not only bad news for its founder, Sam Bankman-Fried, who likely lost billions of dollars, it’s also devastating for many investors. Mr. Bankman-Fried was close to U.S. lawmakers, and managed to court celebrities and sophisticated institutional investment managers to back his exchange.
Beyond investors, FTX built an impressive portfolio of partners and ambassadors, many of whom were paid in stakes in the company. With the crypto company’s collapse, many sponsorships and partnerships are up in the air. Several celebrities who promoted FTX are now being sued alongside Mr. Bankman-Fried by U.S. crypto investors who claim they engaged in deceptive practices to sell digital currency accounts, causing them $11-billion in damages.
Here’s a list of some of the people Mr. Bankman-Fried brought on as partners.
The seven-time Super Bowl champion and his former wife, Gisele Bündchen, closed an equity deal with FTX in June 2021. Brady and his wife were prominent faces of FTX, acting as brand ambassadors and advisers. The exact amount of their investment was not disclosed as part of the deal.
Ontario Teachers’ Pension Plan
Ontario Teachers’ Pension Plan, Canada’s third-largest pension fund, invested a total of US$95-million in FTX. Teachers said the FTX investments represent less than 0.05 per cent of its total net assets.
“These investments were made through our Teachers’ Venture Growth (TVG) platform, alongside a number of global investors,” a statement said. “Naturally, not all of the investments in this early-stage asset class perform to expectations.”
The TVG group’s description of the fund, however, is different on its website, which states, “we invest directly in innovative, late-stage companies (Series B onward) that are using technology to shape a better future.”
This situation marks the second such stumble for a major Canadian pension plan in the world of crypto. In August, the Caisse de dépôt et placement du Québec completely wrote off its US$150-million investment in crypto platform Celsius Network Ltd., which filed for bankruptcy protection in July.
In September, 2021, NBA player Stephen Curry announced a long-term partnership with FTX. He became an FTX global ambassador and received an equity stake in the company. His foundation, Eat.Learn.Play, became a partner with FTX on charitable initiatives.
Tennis superstar Naomi Osaka was the first major female athlete to join FTX as an ambassador in March, 2022. She received an equity stake in the company as part of the deal, and was to receive compensation in crypto.
In November, 2021, baseball player Shohei Ohtani of the Los Angeles Angels joined FTX as an ambassador. The compensation for the deal was to be paid in cryptocurrency and FTX equity, according to CNN.
Since the 2021-2022 NBA season, the home of the Miami Heat has been known as the FTX Arena. The stadium, formerly called American Airlines Arena, will be in need of a new sponsor if the crypto company isn’t able to meet its obligations as part of the 19-year agreement.
“Shark Tank” investor Kevin O’Leary was an FTX investor and spokesperson. In an interview with CNBC, the Canadian businessman said his investment in FTX has gone to “zero” and called for more regulation in the crypto space.
“There won’t be another situation like this for institutional investors,” he said. “We’re simply not going to put capital to work until this stuff gets regulated.”
Comedian Larry David is one of the 11 athletes and other celebrities named in the class action lawsuit.
The “Seinfeld” and “Curb Your Enthusiasm” actor starred in a commercial for FTX that aired during the 2022 Super Bowl in which he portrayed fictional characters dismissing important innovations throughout history and ended with the message “Don’t Miss Out on Crypto.”
Though he’s not an FTX investor or partner, Justin Bieber lost upwards of $1.2 million in the wake of the crash due to a Bored Ape Yacht Club NFT he owns losing 95 per cent of its value. Following FTX’s collapse, owners started panic-selling NFTs, tanking the prices.
Toronto-based Liquid Meta Capital Holdings Ltd., another firm in the crypto sector, said it initiated withdrawal requests from FTX, but they remain unprocessed. The company said it had nearly $7.5-million in cash, stablecoins and other digital assets held by FTX, against which it holds $3.2-million in borrowed stablecoins and digital assets.
O’Leary-backed WonderFi Technologies Inc., which runs Toronto-based crypto platforms Bitbuy Technologies Inc. and Coinberry Ltd., said it participated in a funding round for FTX last year, investing 1 per cent of its reported assets.
The situation at FTX also calls into question its plans to officially launch in Canada by acquiring Bitvo Inc., a Calgary-based crypto exchange. That deal, for which neither FTX nor Bitvo would reveal the exact terms or valuation, was expected to close in the third quarter this year.
Sports organizations with FTX partnerships:
- Major League Baseball
- Monumental Sports & Entertainment
- Golden State Warriors
- Mercedes Formula One
Other investment firms:
Sino Global Capital, Tiger Global Management, Third Point Ventures and Altimeter Capital Management are among the investors who recently poured money into FTX.
The New York Times reports that NEA, IVP, Iconiq Capital, Lux Capital, Mayfield, Insight Partners, Sequoia Capital, SoftBank, Lightspeed Venture Partners, Ribbit Capital, Temasek Holdings, BlackRock and Thoma Bravo are all on the list of FTX investors.
With files from Temur Durrani and Tim Kiladze.