Tom Brady and Giselle Bundchen might be out $70 million.
That's what their stakes in cryptocurrency exchange FTX were worth before the crypto platform's stunning collapse late last year. They're among 9 million clients of the bankrupt firm, nine times a previously reported 1 million users.
While the NFL quarterback and his supermodel ex were known to be investors in FTX—he made now-cringeworthy ads for the exchange in 2021—the numbers weren't known until a bankruptcy hearing that got underway this week. Four mainstream media companies are demanding that a judge release all the client names as prosecutors dig into the firm's failure.
The hearing, which began Wednesday in the District of Delaware Bankruptcy Court, was live-streamed on YouTube.
Brady, Bundchen Likely to Lose Entire Stakes
U.S. football star Brady, Bundchen, and New England Patriots owner Robert Kraft have been revealed as major stakeholders who lost their entire investment in the $32 billion collapse of the FTX exchange.
Bankruptcy documents filed on Monday said that the Tampa Bay Buccaneers quarterback owns more than 1.1 million common shares of FTX trading, while Bundchen has about 680,000 shares. Kraft was shown to have 479,000 common shares and 43,545 preferred shares through one of his companies, KPC Venture Capital LLC. Brady removed his Tweets promoting the exchange in November 2022.
It is unclear how much Brady and Bundchen paid for their stakes, but they may have lost up to $70 million. At a Dec. 14 hearing by the U.S. Senate Banking Committee into the failures of FTX, Shark Tank investor Kevin O'Leary estimated his 32,000 shares to be worth $1 million before the collapse. The NFL star and the former supermodel held about 2 million FTX shares together.
Other FTX investors set to lose investments in the exchange include Silicon Valley venture capitalist Peter Thiel and the prominent hedge funds Sequoia Capital and Tiger Global.
FTX Auditors Find Substantial Sums
Officals handling the FTX restructuring have found more than $5 billion in assets, not including the $425 million in crypto held by the Securities Commission of the Bahamas, the bankruptcy hearing was told. The estimate is five times the $1 billion recovery mentioned in procedural hearings in December 2022.
"We have located over $5 billion of cash, liquid cryptocurrency, and liquid investment securities measured at petition date value. [It] just does not ascribe any value to holdings of dozens of illiquid cryptocurrency tokens, where our holdings are so large relative to the total supply that our positions cannot be sold without substantially affecting the market for the token," Bankruptcy attorney Adam Landis said on behalf of FTX at Wednesday's hearing.
The Bottom Line
Bankruptcy hearing comments from the attorneys overseeing the FTX books raise concerns for other crypto projects and exchanges, as the lawyers said that selling off some FTX assets could materially affect the FTT token's price.
That could reduce FTX's overall asset valuation and add bearishness to some other crypto tokens. Solana is one of those projects, as it sold more than 60 million SOL tokens to Alameda Research, the trading arm of the bankrupt FTX empire. Auditors have given no plans for when and how they will dispose of assets to repay FTX creditors.