Can I still buy NFTs endorsed by celebrities who are involved in fraudulent NFTs on the platform?

Since NFT entered the consumer market in the form of social network avatars and digital collections, celebrities in the entertainment and sports circles have also begun to endorse various NFTs, and some celebrities have even participated in the distribution and production of some NFT projects.

From June to August this year, Truth in Advertising, an American consumer rights protection organization, paid attention to the phenomenon that celebrities are NFT platforms, and began to collect information on celebrities using their personal social media influence to promote NFT, and successively promoted various NFT projects to 19 people. of celebrities have issued warning letters, reminding them to disclose their relationship with the NFT projects they promote, otherwise they will be suspected of deceptive marketing.The group said it would reserve the right to notify regulators.

Celebrities who have received warning letters include singer Justin Bieber, Madonna, NBA star Shaquille O’Neal and other top stars. “Some celebrities have personal stakes in NFTs and/or NFT companies they advertise, but they don’t disclose it, which is a violation of federal law,” Truth in Advertising also reminds consumers to be wary of property damage when buying celebrity-promoted NFTs.

There have been cases of celebrity platforms involved in defrauding NFTs. In May of this year, Candyverse, an NFT project promoted by American comedian Anthony Anderson, stopped updating, and hundreds of investors suffered losses.

It is not only overseas celebrities who support various NFT platforms, but also Chinese entertainment stars who are also keen on this, and they also have an ambiguous relationship with the project. The coldness of the NFT market has also caused the value of NFTs endorsed by celebrities to plummet, leaving nothing but chicken feathers.

19 celebrities warned by TINA for promoting NFTs

In August this year, another 17 overseas celebrities were warned by the US consumer rights protection organization Truth in Advertising (hereinafter referred to as “TINA”) for promoting NFTs. The organization sent letters to remind these celebrities that promoting NFTs on social media may Involved in fraudulent marketing, urge them to disclose the substantive connection with the promoted NFT project as soon as possible to avoid infringing on the rights and interests of consumers.

TINA is a non-profit consumer protection organization dedicated to protecting consumers from fraudulent advertising. It is also an advertising watchdog that sends a legal complaint letter to the regulator once it finds an illegal act in an advertisement.

TINA has been issuing warning letters to celebrities involved in deceptive marketing of NFTs since June, when only two celebrities were disclosed – singer Justin Bieber and actress Reese Witherspoon Witherspoon); on August 8, 17 more people were added to the list of warning letters issued by the organization, covering celebrity occupations including well-known singers, actors, hosts, sports players, etc. Actress Madonna and NBA star O’Neal are all in on the list of warning letters.

The platform is involved in defrauding NFTs, can I still buy NFTs endorsed by celebrities?

In August, TINA issued a warning letter to 17 celebrities who promoted NFTs

These warning letters focus on the phenomenon of stars acting as platforms for various NFTs.

“This is an area rife with deceit,” TINA found when investigating the phenomenon, which includes, but is not limited to, these celebrities “failed to clearly and conspicuously disclose the promoter’s material ties to the NFT company,” and others The omission of important information, such as “the risks associated with investing in such speculative digital assets, the possible financial damage caused by such investments, and the potential benefits of the promoters due to promotional activities”, etc.

The first celebrities to receive warning letters were singer Justin Bieber and actress Reese Witherspoon. Bieber is listed as a “partner” on the NFT project inBetweeners’ website, while Witherspoon was featured in the official promotion for the NFT project World of Women, the actress and her company Hello Sunshine have partnered with the NFT company Cooperation. Although these NFT projects put celebrities in official promotional messages, TINA noted that neither celebrity has disclosed these relationships in their promotional posts.

In its warning letter to Justin Bieber, TINA said they found that Bieber had engaged in “deceptive marketing” of certain NFTs created by the InBetweeners company, specifically, “Bieber was promoting InBetweeners NFTs on his social media accounts. At the time, it was not disclosed that he had substantial ties to the company or that the posts were advertisements.

InBetweeners labels Bieber as a “partner” on its official website, while the NFT project describes Bieber as a “collaborator” on its official Instagram page.

In its warning letter to Justin Bieber, TINA graphically shows the singer’s personal Instagram account for InBetweeners NFT posts, which also serve as evidence that the group told Bieber about deceptive marketing. , “We reserve the right to notify regulators in this regard.”

In addition, TINA stated in the warning letter that Bieber never disclosed the risks associated with investing in such speculative digital products, as well as the possible financial losses of such investments, when promoting NFTs in which he personally held shares, considering that Bieber’s fan base — millions of Gen Z teens and young adults — is especially important to them with this important overlooked message. “Unless the above issues are fully corrected by June 17, Bieber is engaging in deceptive marketing.”

On July 1st, Bieber’s attorney replied to TINA’s letter saying that Bieber has always made it clear that he is a member of the InBetweeners team, and has never concealed the relationship between the two parties. He has not promoted NFT as an investment opportunity, nor encouraged him. His fans buy any particular NFT, so it would be ridiculous for him to warn others that “investing in NFTs is risky”.

While Bieber doesn’t see any problem with his spreading of InBetweeners on social media, his attorney said, “Bieber will update his post about InBetweeners to further emphasize his affiliation with the company.”

Celebrities warned to promote a total of 47 NFT projects

According to the warning letter disclosed by TINA, Honeycomb Tech found that a total of 47 projects had been promoted by these celebrities on their own social platforms.

Among them, there are 8 celebrities who have promoted the information related to the Bored Ape Yacht Club, including TV host Jimmy Fallon, Brazilian football star Neymar Junior, etc.; The female-themed World of Women has been promoted by five celebrities, four of whom are well-known actresses, including singer Madonna and Gwyneth Paltrow in Iron Man’s “Pepper” role. Gwyneth Paltrow) et al.

And actor Drake Bell (Drake Bell), who became popular because of his role in the American TV series “Maki Rush Forward”, is the celebrity who promotes the most NFTs on TINA’s warning list. He has promoted as many as 12 different NFT projects on his personal social media. , in addition to well-known projects such as BAYC and CryptoPunks, he has also promoted many niche NFTs.

American socialite, actress, and model Paris Hilton is second only to Bell in her enthusiasm for NFT promotion. The Hilton hotel group heiress has endorsed 8 NFT projects, including Origin, which she invested in and advised on. Protocol.

The platform is involved in defrauding NFTs, can I still buy NFTs endorsed by celebrities?

List of NFTs promoted by 19 celebrities named by TINA

TINA pointed out that some celebrities have personal stakes in NFTs or NFT companies they promote, but they do not disclose, “this is a violation of federal law,” TINA said, the US Federal Trade Commission (FTC) requires that influencers on social media When a character has any financial, personal or other material relationship with a brand, that information must be clearly and prominently disclosed.

TINA cited precedent, and in October 2021, the FTC issued penalty notices to hundreds of advertisers, informing them that misleading use of ad endorsements could result in significant financial penalties. The FTC said that celebrity endorsements on social media “may be unlawful if they do not disclose the source and amount of any compensation paid directly or indirectly by the company in exchange for the endorsement.”

Comedians run off the platform NFT project criticized

In addition to the disclosure issue, TINA has also investigated an incident with the celebrity endorsement issue project Candyverse, alluding to a potential scam.

Investor Bob said he became concerned about the Candyverse NFT project in March this year because of the long silence from its founders in the project he invested in. Originally, he was going to admit a $300 investment loss, but the appearance of actor Anthony Anderson changed his mind.

Anderson, who was announced as a new member of the team by the Candyverse project in April, was also nominated for an Emmy for his role as NYPD detective Kevin Bernard on the American TV series “Law & Order.”

On April 6, he posted a video on social media saying, “It’s a pleasure to share with you my ownership of a one-of-a-kind Metaverse project called Candy World.” The Candyverse consists of 10 unique themed areas composition, which includes activities, games, social events, plots, and more.

“We are ready to launch our first parcel sale and invite you to snap up Candyverse NFTs. By acquiring Candyverse Critter NFTs, you can now reserve your spot and whitelist your wallet for early access to land, NFTs and special airdrops Join me and be a part of the most unique Metaverse experience ever and you won’t be disappointed.” When posting the video, Anderson also included promotional text and added various hashtags related to the Candyverse, link related URLs.

The platform is involved in defrauding NFTs, can I still buy NFTs endorsed by celebrities?

Anthony Anderson stands for Candyverse

But Anderson has since released no information about the Candyverse project, which did not go ahead with the 10 themed areas as planned. However, the project’s official website still claims that consumers can earn “passive income,” pushing consumers to buy NFTs for 0.09 ETH ($170 at the time).

Except for Anderson, the founder and team of the project have always been anonymous, and investors are increasingly worried about the project running away. The project’s official Twitter account later began to downplay Anderson’s role in the project. On May 17, the account sent a tweet saying that Anderson was “not in the day-to-day operations of the project” and that he was passively marketing, “it’s not his fault.” Candyverse’s official Twitter account has not been updated since.

Candyverse has long been flagged as a RugPull scam by some veteran NFT enthusiasts (the crypto project team creates a token project and then raises the token price, extracts funds, and then runs away when the price drops to zero). After the project stopped updating, the KOL Rug Pull Finder, a Twitter expert in the NFT field that specifically warned about risks, directly scolded Anthony Anderson by name, “You should learn how to do proper due diligence, instead of aimlessly selling NFT projects to your fans to get them. reward.”

Anderson did not respond to the online accusations. Many investors told TINA that they increased their investment after Anderson promoted the project. Some investors said that hundreds of people lost money in the project. “Even if I have investment experience, I was cheated.”

The phenomenon of celebrity endorsement of NFTs is not unique overseas. Some celebrities in the Chinese entertainment industry are also keen to buy or promote NFTs, and even some celebrities have directly cooperated with certain NFTs. The Phanta Bear NFT brought by Jay Chou was once directly called “Jay Lun Bear” by investors, and Wilber Pan endorsed the NFT project Innocent Cats.

However, as the sales of NFTs fell from $12.6 billion in January this year to around $1 billion in June, the NFTs endorsed by celebrities could not resist the decline. 0.3 ETH, a drop of more than 95%; and the floor price of Innocent Cats has dropped from 0.43 ETH in January this year to the current 0.0099 ETH, a drop of more than 97%.

Similarly, when some Chinese-speaking stars endorse NFTs, they seldom disclose their substantive connection and economic interests with the project, and they do not express this as an advertisement when promoting it.

In the overall cold winter of the encryption market, the once bustling NFT market is also cooling down, and the NFT endorsed by top stars has finally come to nothing. When the consumer rights protection mechanism for related NFTs has not been established, after consumers buy NFTs for celebrity endorsements, they can only know the profit and loss of investment.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/can-i-still-buy-nfts-endorsed-by-celebrities-who-are-involved-in-fraudulent-nfts-on-the-platform/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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