A Florida federal judge has dismissed the majority of claims against prominent celebrities, including Steph Curry, Tom Brady, and Gisele Bündchen, in a landmark ruling concerning their promotion of the collapsed cryptocurrency exchange FTX. The decision, issued on 8 May 2025, determined that investors failed to demonstrate the celebrities’ awareness of FTX’s fraudulent activities during their endorsements.

Understanding the FTX Collapse and Legal Battle

The ruling marks a significant development in the aftermath of FTX’s catastrophic collapse in November 2022. The cryptocurrency exchange’s downfall revealed extensive fraud perpetrated by founder Sam Bankman-Fried, who is currently serving a 25-year prison sentence. The legal action targeted high-profile endorsers, alleging they misled investors by promoting FTX without proper disclosure of their financial arrangements.

Judge’s Critical Findings

Judge K. Michael Moore’s ruling emphasised that the plaintiffs failed to establish “actual knowledge” of fraud amongst the celebrity defendants. The court determined that mere negligence or inadequate due diligence does not constitute grounds for fraud liability under current legal frameworks. Additionally, the judge dismissed civil conspiracy claims, clarifying that receiving promotional payments alone does not indicate conspiracy participation.

Legal Precedent and Celebrity Endorsements

The decision establishes a significant precedent for celebrity endorsements in the cryptocurrency sector. It demonstrates that without substantial evidence of direct involvement or knowledge of fraudulent activities, celebrities are unlikely to face legal consequences for promotional activities. This ruling could influence future cases involving high-profile endorsements in the digital asset space.

Ongoing Legal Implications

While this federal ruling provides relief for the celebrity defendants, several state-level claims remain pending. The case highlights the evolving nature of legal responsibilities in cryptocurrency promotion and the challenges in establishing liability for endorsements of fraudulent enterprises.

Future of Celebrity Endorsements in Cryptocurrency

The ruling may influence how celebrities approach future cryptocurrency endorsements, potentially leading to more thorough due diligence processes. However, the decision also suggests that celebrities maintain significant legal protection when acting as promotional partners without direct involvement in operations.

Broader Impact on Digital Asset Marketing

This case serves as a crucial benchmark for understanding the limitations of legal liability in cryptocurrency marketing. It underscores the distinction between promotional activities and actual participation in fraudulent schemes, providing clarity for future digital asset endorsements.

News Source: CNBC