Celebrities who endorsed the cryptocurrency company FTX are regretting their involvement. FTX paid millions of dollars to celebrities to represent their commerce, including retired National Football League player Tom Brady and Golden State Warriors player Stephen Curry. 

In 2021, the stadium home to the Miami Heat of the National Basketball Association was even named after FTX, after the company paid $135 million for a 19-year deal with Miami-Dade County. However, the stadium was recently renamed to the “Miami-Dade Arena” due to the county terminating the contract. 

What preceded and caused this change in public opinion were the revelations of FTX shared in the media that led to the former Chief Executive Officer (CEO) Sam Bankman-Fried being arrested on Monday, Dec. 12 of last year. 

Bankman-Fried founded FTX in conjunction with cryptocurrency trading firm Alameda Research; an article written by Coindesk revealed that both companies use the same digital asset of FTT coins. 

“This meant that the assets were tied to a risky and volatile token, naturally leading to worries about the capital of FTX and Alameda,” a Forbes contributor stated. 

FTX used the FTT coins as its main asset, but on the other hand, Alameda Research used them as repayments for loans on their balance sheet. A cryptocurrency exchange company called Binance then sold its FTT coins valued at $530 million, and this caused many of FTX’s investors to withdraw their money. 

On Friday, Nov. 11 of last year, FTX filed for bankruptcy protection since many of the withdrawals amassed  more money than FTX had. Initially, reports divulged that FTX mixed their customer funds with Alameda Research. 

“The thing that some people find really attractive about it is they like the idea of this currency that exists outside of the government’s reach, and that it is this unregulated space that holds some degree of freedom,” Tualatin High School economics teacher Christopher Duke stated. 

The mixed funds gave rise to billions in deposits of FTX’s customers that went missing. As Duke stated, many cryptocurrencies such as FTX exist outside of the government’s control, and there is an unlimited amount of freedom in control. No consumer protection policy was established by FTX, leaving many of those deposits to remain missing. 

“Regulation is needed to keep financial markets stable,” Duke added. 

These revelations unearthed the activity of FTX and its sister company, Alameda Research. Because of these revelations, Bankman-Fried was arrested on charges of money laundering and security fraud. FTX is now overseen by attorney and CEO John J. Ray III for the time being.