Truth in Advertising (TINA.org), a watchdog organization for consumers’ rights, has accused 19 celebrities of endorsing NFTs without declaring their affiliation with the projects. The group claims that celebrities’ social media promotion of non-fungible tokens is a practice that is “rife with deception.”
19 Celebrities Were Targeted
TINA.org wrote on their website that after investigating “celebrities who promote non-fungible tokens (NFTs) on their social media channels,” they find out that “it is an area rife with deception.”
One of the main issues raised by the group in the letters is the lack of disclosure of any potential financial risks related to investing in such speculative digital assets.
The 19 celebrities pointed out by the watchdog organization include Eminem, Snoop Dogg, Paris Hilton, Timbaland, Gwyneth Paltrow, and Justin Bieber. The organization sent legal letters to the artists, requesting that they promptly reveal any relevant relationships they may have with NFT businesses or products they have endorsed.
Despite the fact that no actual legal consequences have been imposed, TINA.org reported that it wrote letters to the relevant celebrities describing their complaints and warning them against the negative publicity that could result from promoting NFTs.
On the Flipside
- There are a number of class action lawsuits that are ongoing, most notably those against Elon Musk for endorsing Dogecoin and Mark Cuban for endorsing Voyager. However, so far, there has not been a publicized case of celebrities facing legal penalties for shilling NFTs or crypto.
- In 2017, the United States Securities and Exchange Commission (SEC) warned investors about celebrity-backed initial coin offerings in a post on their website. The SEC wrote that even though celebrity endorsements might seem unbiased, in most cases, they are getting paid for promotion. Furthermore, particular celebrities lack knowledge in investing, so they can unintentionally promote investments that do not comply with federal security laws.
Why You Should Care
According to the Federal Trade Commission, influencers must disclose any relevant relationships to the brands they are promoting and must do so in a way that is transparent, obvious, and integrated into the endorsement.
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