Tech

Tom Brady loses millions of dollars with FTX

11/10/2022
Bitcoin Ethereum News

As a result of the dangerous collapse of the FTX exchange, of which FTT is the original currency, Tom Brady, the quarterback of the Miami Buccaneers and one of the most famous players in American football, may also have lost a lot. 

In fact, Tom Brady and his ex-wife, model Gisele Bündchen, had entrusted an unknown amount of their funds into FTX in exchange for FTT coins last year. So, the collapse and takeover of one of the world’s largest cryptocurrency exchanges is bound to hurt the company’s investors, possibly permanently. 

Exacerbating FTX’s already critical situation is yet another twist in recent hours by Binance. Indeed, after an initial intention to acquire the FTX exchange, Binance is back on its heels, declaring that it will no longer buy the exchange. 

Tom Brady and the partnership with FTX

As anticipated, in 2021 Tom Brady and his then-wife had planted a large stake in the cryptocurrency exchange FTX, having already announced a partnership with FTX and its CEO Sam Bankman-Fried in 2020. 

As brand ambassadors, the two obtained an unknown stake in the company in exchange for cryptocurrency, likely FTX’s native FTT coin.

All was well, until last weekend, when Changpeng Zhao, CEO of Binance, expressed his intention to close his $500 million FTX position in the FTT token. 

Since then, despite the ups and downs between Zhao and Fried over a possible resolution of FTX’s collapse, the exchange and its FTT token have collapsed irreversibly. Reaching losses of 85% to below $3 per FTT. 

Cascading down, all other crypto in the market also suffered steep declines. And, as a result, investors, including Tom Brady, are also suffering and will suffer. 

The long-term partnership with FTX entered into in 2021 also mentioned that, both the celebrities and the cryptocurrency company would make an annual multimillion-dollar contribution to charity. 

Now, the collapse of FTX could jeopardize the fortunes of both celebrities. 

In any case, how much both celebrities have invested in the exchange is unclear, although reports have shown that FTX’s valuation increased by more than 1,000% in 2021, from $89 million to over $1 billion. 

As CoinDesk pointed out, FTX was eyeing a $1 billion funding round and a $32 billion valuation in recent months before its collapse these days.

Another twist: Binance will no longer acquire FTX

Adding to an already dire situation is the news of the last few hours: Binance is no longer intent on the potential purchase of FTX

Binance itself declares this in a tweet, writing: 

“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.”

However, it is necessary to take a step back, why would Binance acquire FTX? As explained earlier, it all started with Zhao’s statements about closing his $500 million position in FTT. 

Then, after several attempts at agreement between the CEO of FTX and the CEO of Binance, the situation seemed to be under control: The price of FTT was back in the $20s, after a relative low at $14, while BNB, Binance’s coin, was flying 10%.

However, then the situation degenerated: The price of FTT plummeted 85% to below $3. As a result, BNB’s price also fell again, eventually losing as much as 10%.

It was only at this point that Zhao declared his intention to buy FTX, a very strategic move according to some. Although CZ had already anticipated that they would do the Due Diligence (DD) of FTX in the coming days to see whether the acquisition deal would go through or not. 

Now it is official, the DD has yielded its results and Binance no longer intends to buy, so FTX will have to continue to fend for itself in this disastrous collapse. 

Could Justin Sun solve FTX’s liquidity crisis?

Justin Sun, the billionaire founder of the Tron blockchain, said yesterday that he is working on a solution with FTX to try to solve the exchange’s liquidity crisis. 

Indeed, in a tweet Sun stated: 

“Following my announcement to support all Tron token holders (#TRX, #BTT, #JST, #SUN, #HT) on FTX, we are putting together a solution together with FTX to start a path forward.”

At that point, probably to reassure savers, FTX CEO Sam Bankman-Fried retweeted the post, his first Twitter action since announcing that Binance had agreed to acquire the exchange. 

Which we now know will no longer happen, as Binance has stated that FTX’s problems are beyond its control. In any case, Sun did not provide further details about the solution he is working on for FTX. 

Only an earlier tweet of his suggests that Sun was intent on protecting Tron users with locked funds on FTX by supporting them to redeem their deposited Tron tokens on the FTX platform at a 1:1 ratio. 

Moreover, in subsequent tweets today, Sun said that the ongoing liquidity crisis, despite its short-term nature, is detrimental to both industry development and investors, adding that his team has been working hard to prevent further deterioration. 

So, we do not know if and when the solution initiated by Sun might work, and we only have to wait for further updates. 

Source: https://en.cryptonomist.ch/2022/11/10/tom-brady-binance-happening-ftx/