Yes, celebrities promoted FTX’s yield-bearing accounts (YBAs), which the company offered without proper securities registration. These accounts allowed customers to earn returns on their crypto holdings, presenting them as legitimate investment products when they were actually unregistered securities. Major athletes and entertainment figures—including Tom Brady, Steph Curry, Larry David, Shaquille O’Neal, Naomi Osaka, and others—received millions in compensation to endorse FTX and its products without disclosing the fraud happening behind the scenes. The problem ran deeper than simple endorsements.
FTX founder Sam Bankman-Fried secretly transferred at least $4 billion in customer funds from FTX to his trading firm, Alameda Research, without disclosure. FTX entities lent more than half of their $16 billion in customer funds to Alameda, totaling more than $10 billion in loans. At least $8 billion in customer funds were believed to have been stolen in total. When customers bought into the narrative promoted by recognizable celebrities, they were putting money into accounts backed by a massive fraud scheme that was quietly siphoning their assets.
Table of Contents
- What Were Yield-Bearing Accounts and Why Did the SEC Consider Them Unregistered Securities?
- How Much Money Did Celebrities Receive to Promote FTX?
- What Actually Happened to Customer Funds at FTX?
- The $11 Billion Consumer Class Action Lawsuit Against FTX and Its Celebrity Endorsers
- The Celebrity Dismissal Ruling and What It Means for Plaintiffs
- Sam Bankman-Fried’s Criminal Conviction and Sentencing
- What This Case Reveals About Celebrity Endorsements and Crypto Fraud
- Conclusion
What Were Yield-Bearing Accounts and Why Did the SEC Consider Them Unregistered Securities?
Yield-bearing accounts (YBAs) were financial products offered by FTX that allowed customers to earn returns or interest on their cryptocurrency holdings. Rather than simply holding digital assets, customers could deposit their crypto into these accounts and receive periodic payments in exchange for allowing FTX to use their funds. On the surface, they resembled savings accounts or investment products offered by traditional financial institutions. The appeal was straightforward: earn passive income on assets you already owned. The regulatory problem was equally clear. The securities and Exchange Commission (SEC) and other regulators treat investment products that promise returns to customers as securities, which require registration and compliance with disclosure laws. Because YBAs promised returns, they fell into this category—yet FTX never registered them as securities.
This meant customers had virtually no regulatory protections. They couldn’t see the financial disclosures that registered securities require. They had no guarantee of insurance or recovery mechanisms if the company failed. And the company had no legal obligation to transparently explain how returns would be generated or what risks customers were taking. What made the celebrity endorsements particularly damaging was that they created a false impression of legitimacy. When Tom Brady—who earned $55 million over three years for just 20 hours of work per year—appeared in FTX advertisements, customers reasonably assumed a major athlete wouldn’t risk his reputation for a fraudulent product. The same logic applied to Steph Curry, who received $35 million for the same arrangement, and to other celebrities whose faces appeared in Super Bowl ads and promotional campaigns.
How Much Money Did Celebrities Receive to Promote FTX?
Tom Brady’s compensation package was among the largest: $55 million for a three-year commitment requiring only 20 hours of work per year. That breaks down to roughly $916,000 per hour of actual work—a staggering fee that underscores just how much FTX was willing to spend on celebrity credibility. Steph Curry received $35 million for the identical arrangement. These weren’t bit-part endorsements or one-off social media posts. The companies were locking in major sports figures for extended periods. Larry David, famous for creating the television show “Seinfeld,” received $10 million for appearing in a 2022 Super Bowl advertisement.
For 30 seconds of screen time during football’s biggest advertising event, the legendary comedian was paid enough to live comfortably for years. Other celebrities in the FTX universe included NFL players like Trevor Lawrence, David Ortiz, and Shohei Ohtani, as well as tennis star Naomi Osaka and model Gisele Bündchen. Not all compensation amounts were publicly disclosed, but the pattern was clear: FTX spent hundreds of millions acquiring celebrity endorsements. The limitation here is critical: these payments were made between 2021 and 2022, before FTX’s November 2022 collapse. Celebrities collected their fees while customers were losing money. The company had the cash to pay celebrities exorbitant sums precisely because it was misappropriating customer funds. A customer who deposited $10,000 into a yield-bearing account was indirectly financing Tom Brady’s endorsement deal.
What Actually Happened to Customer Funds at FTX?
FTX collapsed in November 2022 when it became clear that the company had been running a massive embezzlement scheme. Sam Bankman-Fried and other executives secretly transferred at least $4 billion in customer deposits from FTX to Alameda Research, the cryptocurrency trading firm also owned by Bankman-Fried. Beyond these direct transfers, FTX entities lent more than half of their $16 billion in customer funds to Alameda without disclosure—totaling more than $10 billion in loans. In total, at least $8 billion in customer funds were believed to have been stolen. The mechanism was brutal in its simplicity. Customers deposited crypto into FTX accounts, including yield-bearing accounts, trusting that the exchange would safeguard their assets. Bankman-Fried treated these deposits as if they were his personal piggy bank. He used the funds to prop up Alameda’s losing trades, to acquire celebrity endorsements, to buy real estate, and to make political donations.
When the scheme unraveled, customers discovered that their funds simply weren’t there anymore. The exchange had maintained false records showing that customer balances were secure when in reality, most of the money had been stolen. The yield-bearing accounts made this worse by creating the illusion of legitimacy and financial sophistication. A customer might have told themselves: “FTX is a regulated exchange. Steph Curry and Tom Brady trust them. They’re offering me 5% annual returns.” In reality, they were handing their money to a Ponzi scheme. The “returns” they received in some cases came from newly deposited customer funds, not from genuine business operations. When the flow of new deposits slowed, the scheme collapsed.
The $11 Billion Consumer Class Action Lawsuit Against FTX and Its Celebrity Endorsers
A consumer class action lawsuit was filed in Florida courts alleging that FTX and the celebrities who promoted it were liable for violations related to yield-bearing accounts and other unregistered securities. The lawsuit sought $11 billion in damages—roughly equivalent to the amount of customer funds that disappeared. The plaintiffs’ theory was straightforward: celebrities who accepted millions in compensation to promote FTX had a responsibility to verify what they were promoting, and by lending their credibility to the exchange, they contributed to customer losses. The lawsuit named numerous celebrities, including Tom Brady, Steph Curry, Larry David, Shaquille O’Neal, Naomi Osaka, Shohei Ohtani, NFL player Trevor Lawrence, baseball player David Ortiz, and model Gisele Bündchen.
The specific claim was that these endorsers promoted unregistered securities without proper disclosures, thereby violating federal securities laws and state laws in Florida and Oklahoma. Plaintiffs argued that the celebrities benefited financially from their endorsements while customers suffered catastrophic losses. The comparison here is important: a typical class action lawsuit allows customers to pool their claims and sue jointly, avoiding the costs of individual lawsuits. An $11 billion settlement would have been distributed to customers who lost money, roughly proportional to their losses. However, the lawsuit faced a critical challenge: could celebrities actually be held liable for endorsements they made without knowledge of the fraud? That question would determine whether customers had any path to recovery from the high-profile figures who had promoted FTX.
The Celebrity Dismissal Ruling and What It Means for Plaintiffs
In May 2025, a federal judge dismissed most of the claims against the celebrity endorsers. The judge ruled that the celebrities lacked intent to deceive and did not have prior knowledge of FTX’s fraud. This was a significant defeat for the class action plaintiffs. The court found that celebrities were “uninformed, negligent, or even reckless” in promoting FTX without proper due diligence, but that negligence alone was not enough to hold them legally liable for investor losses under federal securities law. Intent to defraud, the court determined, is a requirement for civil liability in many securities cases. The warning embedded in this ruling is substantial. Celebrities who accept multimillion-dollar endorsement deals have no legal obligation to investigate the companies they promote, even if those companies are engaged in massive fraud.
As long as they don’t knowingly lie, they face minimal legal exposure. The court’s language—”uninformed, negligent, or even reckless”—suggests the celebrities made little to no effort to understand what they were endorsing, yet the law did not punish them for this carelessness. This creates a perverse incentive structure where celebrities can accept huge payments from fraudulent companies with relative impunity. However, the ruling was not entirely a complete victory for the defendants. Some claims under Florida and Oklahoma securities laws remained intact. Plaintiffs were given an opportunity to amend their claims with concrete evidence that celebrities had prior knowledge of FTX’s fraud. If customers could demonstrate that Tom Brady, Steph Curry, or others were aware of the fraud and promoted FTX anyway, those specific claims might survive. But the burden of proof became much heavier, and most plaintiffs lacked access to evidence that would show celebrity knowledge of criminal activity.
Sam Bankman-Fried’s Criminal Conviction and Sentencing
While the civil lawsuit against celebrities largely collapsed, the criminal case against FTX founder Sam Bankman-Fried moved forward decisively. On November 2, 2023, Bankman-Fried was convicted on all seven counts, including conspiracy, wire fraud, and money laundering. The trial revealed the extent of the fraud: internal messages showing that Bankman-Fried deliberately concealed the Alameda loans from customers, knowingly maintained false balance sheets, and discussed how to hide the theft of customer funds. On March 28, 2024, Bankman-Fried was sentenced to 25 years in federal prison. The court also ordered him to forfeit $11.02 billion, representing the proceeds of his fraud.
This was one of the largest financial crimes in recent U.S. history. A 25-year sentence meant Bankman-Fried would likely spend the majority of his remaining life incarcerated. The message was clear: while celebrities who endorsed the fraud faced no consequences, the person who orchestrated the scheme faced decades in prison. The forfeiture order suggested that customers might eventually recover some portion of their losses, though the process of collecting from a bankrupt fraudster would take years.
What This Case Reveals About Celebrity Endorsements and Crypto Fraud
The FTX collapse exposed fundamental weaknesses in how celebrity endorsements function in the crypto space. When an athlete or entertainer accepts a multimillion-dollar fee to promote a financial product, they are implicitly representing that they have confidence in that product. Customers reasonably interpret a celebrity endorsement as a form of implicit vetting—the assumption being that major public figures wouldn’t risk their reputations for fraudulent schemes. Yet as the May 2025 ruling demonstrated, the law imposes no obligation on celebrities to actually verify what they promote.
Moving forward, the case suggests that customers should treat celebrity endorsements as marketing, period—not as evidence that a financial product is legitimate. The ruling did not establish that celebrities have a duty of care toward consumers who rely on their endorsements. This means the burden of due diligence falls entirely on customers. Before depositing funds into any cryptocurrency product, especially one promising fixed returns, investors should independently verify: Is it registered as a security? What financial disclosures are available? Who are the actual operators and what are their backgrounds? A celebrity’s face on an advertisement should never substitute for these basic questions.
Conclusion
The FTX class action against celebrities who promoted unregistered yield-bearing accounts illustrates a hard truth: massive fraud can occur in plain sight, endorsed by recognizable figures who face minimal accountability. Tom Brady, Steph Curry, Larry David, and others accepted millions to promote FTX’s products without conducting meaningful due diligence. Customers who relied on these celebrity endorsements deposited at least $8 billion that was then stolen by Sam Bankman-Fried and transferred to his trading firm, Alameda Research. When plaintiffs sued the celebrities for damages, a federal judge ruled in May 2025 that negligence is insufficient to hold endorsers liable—intent to defraud is required. If you were a customer who lost money in FTX’s yield-bearing accounts or other products, your options are limited but not nonexistent.
Some claims under Florida and Oklahoma securities laws remain in litigation. The $11.02 billion forfeiture ordered against Bankman-Fried represents potential recovery funds, though the actual collection process will take years. Consider consulting with a securities attorney about joining the remaining class action or filing an individual claim. The most important lesson from this case is immediate: never rely on a celebrity endorsement as evidence that a financial product is legitimate. Do your own research, verify registration status, and be deeply skeptical of any investment promising consistent returns in the volatile crypto space.
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