The collapse of FTX and the arrest of its founder/ex-CEO have raised worries about major sports stars such as Tom Brady, Steph Curry, and Naomi Osaka’s involvement in unregulated crypto markets.
Fans of sports who view their favorite athletes as role models may be hesitant about taking their financial advice.
The bankruptcy of FTX and the arrest of its founder/ex-CEO have raised ethical issues regarding athletes such as Tom Brady, Steph Curry, and Naomi Osaka who have helped to legitimize the unregulated cryptocurrency world. This reignites the debate about the cost of blindly supporting your favorite teams or players for the average fan.
Cryptocurrencies are digital currencies that use the blockchain to store transactions. This concept has not been sanctioned by any government, institution, or organization, and is still confusing, as it was initially the domain of tech-savvy coders, people who distrusted central banking systems and governments, and speculators.
Nevertheless, investors are taking more risks because they can’t lose. The moral quandary that sports stars and teams are facing is whether or not to endorse products that could potentially cause financial harm to their fans. Or should fans take responsibility for their own risky behavior regardless of whether they are encouraged to do so.
“In hindsight, it was a risky business decision that put Curry and Brady in a bad light,” Mark Pritchard, a professor at Central Washington University who studies the intersection of sports and ethics, said in an email to The Associated Press. “I’m not sure how much research was done before the decision was made, but recall the quote from Warren Buffet: ‘Be afraid when others are greedy and greedy when others are afraid.’”
Several years ago, the marriage between cryptocurrency and sports was born. Despite the numerous issues plaguing the sector, it has been steadily growing. For example, the IEG sponsorship study found that FTX, and other cryptocurrency firms, spent $130 million on NBA game sponsorships during the 2021-22 season, compared to $2 million the previous season.
Before its collapse, FTX had many ties to the sports world. The company paid $135 million for the naming rights to an arena, and an undisclosed amount for patches on MLB umpire uniforms. The Miami Heat also received an additional $10 million from FTX for placement of advertisements in their stadium or throughout the Warriors organization.
Numerous celebrities, including Curry and Brady, have endorsed FTX’s failed business model.
Ben Salus, a Philadelphia sports fan who has lost money on cryptocurrency, said he was taken aback by the sudden influx of crypto-related signage around his favorite teams.
“It’s a very strange transition, especially since I don’t think the world was ready for the rise of cryptocurrency,” Salus said. “You have these great personalities willing to back something they don’t know much about. The answer is yes, but not everything.”
The debate has become even more complex in the past five years, with the intersection between cryptography, digitized works of art offered in the form of non-fungible tokens (NFTs), legalized sports gambling and gaming, and the ever-expanding virtual reality Metaverse, all of which have become increasingly popular with large factions of athletes and fans.
“It’s much more connected than people realize,” said Ryan Nicklin, who studies the role of cryptocurrency in sports as part of his public relations business. “Because when you purchase any of these Metaverse games, you’re essentially making a bet, since you don’t know if the asset you bought will go up or down in value.”
Cryptocurrency was not the main driver of the move into the mainstream, but as sports grew in popularity, teams and sports leagues began to jump in.
“A lot of sponsorships have to do with emotional attachment,” said Brandon Brown, who teaches business and sports at New York University’s Tisch Institute for Global Sport. “So it would make sense for these (crypto) companies to partner with a sports team or sports celebrity because there is an emotional bond associated with that partnership.”
The 2020 Olympics was a turning point when several athletes, including Carolina Panthers Pro Bowl lineman Russell Okung, declared that they would accept all or part of their multi-million-dollar salaries in cryptocurrency.
“Many buy Bitcoin to get rich quick,” Okung tweeted shortly after the announcement. “I bought it to be cash free.” Not long after, Bitcoin.com proudly proclaimed that Bitcoin’s $6.5 million price increase had almost doubled Okung’s crypto-based salary.
Other big names followed, including actors Matt Damon and Larry David, as well as the mayors of New York and Miami, who both announced they would be receiving their salaries in cryptocurrency, sparking a lot of debate.
Aaron Rodgers, Shaquille O’Neal, Beckham Jr. and Trevor Lawrence were among the many high-
