Cryptocurrency popularity has boomed in recent years, and celebrities have gotten in on the fanfare. But as criminal activity in the space soars, so has the likelihood that influencer endorsements could lure investors into costly digital-asset scams.
Kim Kardashian, Floyd Mayweather, and former NBA star Paul Pierce are among recent celebrities in the hot seat for their crypto promotions, accused in a lawsuit filed earlier this month in California of using their fame to “pump” a little-known cryptocurrency called EthereumMax as part of a larger scheme to profit themselves and defraud investors.
For Mayweather, the lawsuit marks the second time the boxer has come under scrutiny for allegedly making misleading statements around crypto. In 2018, the Securities and Exchange Commission charged Mayweather and music producer DJ Khaled, for failing to disclose payments they received for promoting investments in initial coin offerings.
Fraudsters have also misused high-profile figures without their knowledge to coax fans, using the faces of famous names including Prince Harry and Meghan Markle, Bill Gates, Mark Zuckerberg and Sir Richard Branson to promote fake endorsement schemes related to bitcoin (BTC-USD).
This makes celebrity promotions of cryptocurrencies particularly vulnerable to criticism as ill-informed investors rush to get in on speculative products because stars they admire are into crypto. It explains why Reese Witherspoon became the subject of backlash after a Jan. 11 tweet backing “avatars, crypto wallets and digital goods,” and why Matt Damons’s crypto commercial turned into a laughing stock online.
In the UK, Britain’s financial watchdog recently outlined plans to restrict the marketing of crypto assets and other high-risk investments amid the boom in ads and endorsements from celebrities. Even amid criminal allegations over such promotions and increased scrutiny from the public and regulators, the list of popular names endorsing crypto to their audiences of millions is growing.
Here are some of the stars (in no particular order) who have lended their names to promote digital assets:
Academy Award-winning actress and Goop founder Gwyneth Paltrow recently offered up a $500,000 bitcoin giveaway to her 2.7 million Twitter followers. The announcement comes after her recent participation in a $200 million debt and equity financing round for the crypto mining company TeraWulf, which aims to produce bitcoin using 100% zero-carbon energy.
After first making crypto headlines last September when she announced she purchased ethereum (ETH-USD), Academy Award-winning actress Reese Witherspoon had fans scratching their heads earlier this month with a tweet about the digitization of the “near” future.
Paris Hilton has repeatedly expressed her enthusiasm for digital assets, including cryptocurrencies and NFTs, even holding events in the metaverse. She also previously endorsed NFT technology on “The Tonight Show Starring Jimmy Fallon.”
In an Instagram post last summer, Kim Kardashian asked her 250 million followers: “Are you guys into crypto????” before drawing their attention to a little-known token called EthereumMax. The promotion is now the subject of a lawsuit that alleges the endorsement was a profiting scheme by Kardashian and other celebrities involved.
Matt Damon was the poster boy in a global advertising campaign rolled out by Crypto.com, which released the following ad (see below) this month. The commercial became the subject of scrutiny over concerns Damon’s missive in the clip was encouraging young investors to put money into high-risk crypto assets.
In 2017, actor Jamie Foxx became an early celebrity endorser of crypto when he promoted the token sale of Cobinhood, a free cryptocurrency trading exchange.
The family Instagram account of TikTok star Charli D’Amelio posted a photo with a caption thanking the cryptocurrency exchange Gemini for her birthday gift of bitcoin in May as part of a partnership with the platform.
Mike Tyson recently announced that he was “all in” on the cryptocurrency Solana (SOL-USD), asking his 5.7 million Twitter followers in a separate tweet how high they think the price of the crypto will go.
Tom Brady has actively promoted crypto on his social media accounts. He and his wife, supermodel Gisele Bündchen, starred in a $20 million ad campaign for crypto exchange FTX.
Boxing champion Floyd Mayweather was accused in a lawsuit filed this month in California of using his fame to “pump” a little-known cryptocurrency called EthereumMax as part of a larger profiting scheme. In 2018, the Securities and Exchange Commission charged Mayweather with failing to disclose payments he received for promoting investments in initial coin offerings.
The former “Bachelor” star and entrepreneur Matt James has been actively promoting crypto investing and NFTs, but is careful to note that he is not giving professional financial advice, he is just educating.
“I’m never instructing people to buy,” he said on Yahoo Finance Live earlier this month. “I’m giving them information about why I’m doing the things I’m doing and why I have strong convictions, in particular, from a scarcity standpoint in bitcoin.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
Original posted at finance.yahoo.com