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What Taylor Swift Can Teach Us About Investing

The superstar reportedly dodged a deal with FTX by asking one simple question.

Back in FTX’s heyday, international superstar Taylor Swift reportedly had been offered a $100 million sponsorship deal with the offshore crypto exchange.

Turns out, she declined and then avoided public embarrassment and legal fallout by asking one simple question.

In negotiations with FTX, Swift reportedly asked FTX representatives “Can you tell me that these [listed assets] are not unregistered securities?” according to Adam Moskowitz, the plaintiff’s lawyer in the FTX endorsements suit – who is handling a $5 billion class action lawsuit against celebrity FTX promoters like Shaquille O’Neal and Tom Brady.

That being said, Swift ended up being one of the few celebrities who did their homework, and due diligence on the now-bankrupt crypto exchange. Swift however, did not immediately respond when asked for comment.

Even if the story ends there, crypto investors can learn a valuable lesson from Swift’s actions. While Swift has immense musical talent, she’s also proven herself to be a formidable businesswoman with this parable, and more.

Taylor Swift’s question was surprisingly prescient, given that now, US regulators are aggressively cracking down on crypto exchanges, asking whether they’re providing unregistered securities.

But Swift had just missed the mark on what really brought FTX down – good old fraud. While Swift took the extra step in asking about FTX’s offerings, she did not directly ask FTX representatives if their management team is participating in misappropriation of funds – like secretly sending user assets to an affiliated hedge fund.

The question Swift asked about whether listed assets on FTX are registered securities may have indicated a red light to the singer-songwriter. If the deal with Swift didn’t go through, it means that FTX wasn’t convincing enough – and may have shown red flags to the star and her team. After all, during FTX’s investigation, representatives were either confused, uncoordinated, or defensive regarding the matter. And that may have seemed shady enough to turn the lucrative deal down.

While it’s uncertain how the deal exactly happened and failed, it was only until December 7, a month after the FTX meltdown, that reports regarding FTX’s approach to Swift circulated. If the deal went through, Swift would have gotten $100 million for placing FTX branding at her concerts, but according to sources from the Financial Times, skepticism already was there due to the astronomical price of the deal. Beyond that, FTX already paid $135 million for naming rights for a sports stadium.

That being said, Swift’s acuteness in asking sweeping questions about what she will invest in has future-proofed her for disaster. She wasn’t focused on specifics, she wasn’t constantly watching for any news, nor looking at any particular clause in securities law for that matter – rather, she asked a challenging question that was broad enough to get the answer she wanted: whether the deal would end up causing her harm.

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