Truth in Advertising, a consumer watchdog group, says celebrities who promote nonfungible tokens through their social media channels are “rife in deception.”
Truth in Advertising, a consumer watchdog group, has named 19 celebrities who allegedly promoted nonfungible tokens (NFTs), without disclosing any connection to the projects.
According to the not-for profit consumer advocacy group, they had investigated celebrities who promoted non-fungible tokens on social media channels. They found that this area was “rife with deception.”
The list includes sports stars Floyd Mayweather, Tom Brady, and music icons Eminem, Snoop Dog, and many actresses, including Gwyneth Paltrow. They have all been asked to immediately disclose any connections they may have to NFT brands or companies they promote, and they were sent letters.
“The promoter frequently fails to disclose material connections to the endorsed NFT firm.”
NFTs are digital certificates that can be stored on the blockchain and prove ownership of digital or physical assets. Many high-profile projects attract celebrity endorsement and promotion.
TINA.org stated that the company sent letters on Aug. 8, to the celebrities, outlining their grievances as well as advising them about the potential harmful effects NFTs could have on the public.
The letter outlines the main concerns of the group, namely that financial risks related to investing in speculative digital assets are not being disclosed.
TINA.org had previously written letters to Justin Bieber’s and Reese Witherspoons legal teams on June 10, for promoting NFTs through their social media accounts, without disclosing any connection to the projects.
Bieber’s legal staff responded on July 1 with a denial of any wrongdoing, but notifying that the posts would be updated.
TINA.org was contacted by Witherspoon’s legal staff on July 20 to confirm that the actress is not receiving any benefits from NFT promotion.
FTC guidelines could allow for shilling
TINA.org posted a blog on their website stating that celebrities mentioned above could be in violation of Federal Trade Commission (FTC), rules concerning the use of endorsements and testimonials in advertising and requirements for influencers.
The advocacy group links directly to the FTC website. It outlines the requirements that influencers disclose all material connections to brands and makes disclosures in the endorsement clear, unambiguous and conspicuous.
Celebrities have not yet been charged with any criminal offenses for buying crypto or NFTs.
Although there are many ongoing class action lawsuits, is most well-known for its opposition to Elon Musk, for his endorsement for Dogecoin, as well as Mark Cuban for supporting Voyager crypto products .
Other celebrities such as Matt Damon created a stir when they featured him in an advertisement for crypto products. The actor was relentlessly ridiculed and mocked for his participation.
SEC: Don’t listen only to celebs
The 2017 United States Securities and Exchange Commission (SEC), warned investors of celebrity-backed initial coin offerings.
Investors should be aware that celebrity endorsements might not appear to be objective, but may actually be part of a paid promotion.”
“Celebrities who endorse investments often don’t have the expertise necessary to ensure that the investment meets federal securities laws.”
The SEC states that celebrities and influencers who use social media to encourage followers to invest in stocks or other investments are illegal if they don’t disclose the source, nature, and amount of any compensation received, either directly or indirectly.