Top-charting, singer-songwriter Taylor Swift could have potentially been on the downfall of the bankrupt crypto-exchange platform FTX but saved herself by asking a straightforward due-diligence question that seemingly few others did.
Key Details
- Crypto-exchange platform FTX faced a sudden collapse in November that rocked the crypto world and caused many customers to lose billions of dollars in the fall.
- More than a dozen celebrities—including NBA star Stephen Curry, NFL great Tom Brady, supermodel Gisele Bündchen, tennis legend Naomi Osaka, and popular TV show Seinfeld co-creator Larry David—are named in a November 2022 class-action lawsuit because of their partnerships with FTX, according to Yahoo News.
- Taylor Swift was allegedly offered a $100 million sponsorship deal, but she questioned if the assets were secure securities and ultimately turned down the deal.
Why it’s news
More effects of the FTX fallout are emerging after the company crashed in November 2022, with many big-name celebrities being sued for endorsements related to the bankrupt exchange platform.
Over a dozen celebrities have been named in a class-action lawsuit for accepting endorsement money and promoting the company.
The complaint blames FTX and its paid brand ambassadors for actively participating in the “offer and sale of unregistered securities in the form of yield-bearing accounts,” as well as abetting fraud “designed to take advantage of unsophisticated investors from across the country, who utilize mobile apps to make their investments.”
One huge celebrity asked a simple question saving herself from the FTX fallout—Taylor Swift. Swift was allegedly offered $100 million to endorse the platform, but she turned down the multiple offers from FTX.
Adam Moskowitz, a key attorney in the class-action lawsuit against the celebrity ambassadors, says legal discovery proceedings revealed that Swift did due diligence on FTX, and she asked the intelligent question, “Can you tell me that these are not unregistered securities?”
Moskowitz states that many celebrities did not do their due diligence to see if FTX was breaking the law and decided to accept a large amount of money, but Swift asked questions and realized something was not right.
A security is a tradeable asset that holds value, similar to a stock or bond. All securities that are offered and sold in the U.S. must be registered with the Securities and Exchange Commission (SEC). In a complaint against FTX executives last December, the SEC says the company’s cryptocurrency, FTT, is classified as a security because it was sold as an investment contract, but it was not appropriately registered, according to Business Insider.
Due to the inappropriate registration, the lawsuit accuses the celebrities of promoting unregistered security and seeks to recover damages for customers who lost money after FTX filed for bankruptcy last year.
Swiftly becoming a billionaire
Taylor Swift is undoubtedly an incredible entertainer, but as seen above, she is also a brilliant businessman who could soon join the billion-dollar club.
Last month her record-breaking Eras Tour began, which many expect could move the singer to billionaire status.
Forbes currently estimates Taylor Swift’s net worth at $570 million.
Billboard estimates that the tour will generate $591 million in ticket sales, while Music Industry Program Coordinator David Herlihy and Forbes estimate Swift will bring home closer to $620 million from Eras.
The 52-date tour will make her the highest-grossing female touring artist of all time and bring her up to billionaire status.
The buzz around the tour has been massive, even causing Ticketmaster to break down from the many fans fighting for tickets. The problems with the ticketing site were so extensive that fans, referred to as Swifties, have taken the ticket sale site to court.
The tour will make Swift the highest-grossing female touring artist of all time, bumping Madonna to the second spot after her 2008 and 2009 Sticky & Sweet tour brought $407 million in sales.