Consumer watchdog group Truth in Advertising (TINA.org) has called out 19 celebrities for allegedly promoting non-fungible tokens (NFTs) without disclosing their connection to the projects.
The non-profit consumer advocacy organization said on its website that it has investigated “celebrities promoting non-fungible tokens (NFTs) on their social media,” concluding that “this is a plagued area. to deception”.
Among the list of stars are sports stars Floyd Mayweather and Tom Brady, music icons Eminem and Snoop Dog, and several actresses, including Gwyneth Paltrow, who have all received letters urging them to immediately disclose any material connections they deal with NFT companies. or brands they have promoted, indicating:
“The promoter often fails to disclose a material connection to the approved NFT company.”
NFTs are digital certificates stored on the blockchain proving ownership of a digital or physical asset, often a work of art, with many high-profile projects often attracting celebrity endorsements and promotion.
Although no actual legal penalty was attached, TINA.org noted that it had sent letters to the celebrities involved on August 8 outlining their grievances and informing them of the potentially harmful effect shilling NFTs can have. on the audience.
One of the group’s main concerns outlined in the letters is that the possible financial risks associated with investing in such speculative digital assets are not disclosed.
TINA.org previously sent letters to the legal teams of Justin Bieber and Reese Witherspoon on June 10 for promoting NFTs on their social media accounts without disclosing their connection to the projects.
Bieber’s legal team responded on July 1, denying any wrongdoing but saying the posts would be updated.
While Witherspoon’s legal team contacted TINA.org on July 20, claiming the actress was not receiving any material benefits from NFT’s promotion.
Shilling could violate FTC guidelines
In a blog post on their website, TINA.org wrote that the previously mentioned celebrities may be violating Federal Trade Commission (FTC) rules regarding the use of endorsements and testimonials in advertising and requirements for influencers. .
The advocacy group points to the FTC’s website which says influencers must disclose any material connection to brands they endorse and make disclosures clear, unambiguous, conspicuous, and consistent with the endorsement.
So far, there have been no publicized cases of celebrities facing legal penalties for NFT in shilling or crypto.
Although there are several ongoing class action lawsuits, the most famous against Elon Musk for his endorsement of Dogecoin and Mark Cuban for promoting Voyager crypto products.
A handful of other celebrities like Matt Damon caused a stir when he appeared in an ad promoting crypto products, which saw the actor relentlessly mocked and ridiculed for his involvement.
Don’t listen to celebrities: SEC
In 2017, the United States Securities and Exchange Commission (SEC) warned investors against celebrity-backed initial coin offerings in a message posted on their website.
“Investors should note that celebrity endorsements may appear unbiased, but may instead be part of a paid promotion.”
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“Celebrities who endorse an investment often do not have sufficient expertise to ensure that the investment is appropriate and complies with federal securities laws.”
According to the SEC, celebrities and influencers using social media to encourage their followers to buy stocks or other investments could be illegal if they do not disclose the nature, source and amount of any compensation paid, directly or indirectly.