|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cryptocurrency News Articles
Celebrity Endorsements in Crypto: A Red Flag or Just Marketing?
Sep 06, 2024 at 09:30 pm
Celebrity backing can make a big difference in the success of a crypto project, but that doesn't mean the endorsement of a famous person makes it trustworthy.
Celebrity endorsements can play a significant role in the success of a crypto project. However, it's crucial to note that not all celebrity-backed ventures are trustworthy.
According to a 2023 research paper by two former United States Securities and Exchange Commission economists, there is a link between a celebrity endorsement of a crypto project and the likelihood of its dubiousness.
During their research, White and Wilkoff found that in 2019, 26% of the initial coin offerings (ICOs) they examined were likely scams. That number increased to nearly 40% by 2023.
While celebrity endorsements can attract consumer attention, they shouldn't be the sole factor in determining a project's legitimacy, said Amy-Rose Goodey, managing director of the Digital Economy Council of Australia (DECA). Thorough research and a critical eye are key.
“It always comes down to due diligence and a keen eye for detail. A major red flag would be if all the essential elements are missing,” Goodey told Cointelegraph.
A number of big names, including sports stars Shaquille O’Neal and Tom Brady, actresses Gwyneth Paltrow and Paris Hilton, and many more high-profile public figures have lent their names to crypto projects that have ended up going bust or disappearing altogether.
According to Goodey, celebrity backing doesn’t always mean a project is untrustworthy and should be avoided as long as all the key elements for success are present and transparent.
“Celebrity endorsements have long been a staple in the marketer’s toolkit across every industry, dating back to the 1700s when ‘royal endorsements’ served as the precursor to modern celebrity branding,” she said.
A lack of transparency isn't just a red flag for potential investors; it can also attract the attention of regulators.
In March of 2023, eight celebrities, including actress Lindsay Lohan and YouTuber Jake Paul, were among a group of people charged by the SEC for not disclosing that they were paid to shill a crypto project.
Around the same time, a class-action suit was filed against influencers who helped promote the now-defunct crypto exchange FTX without disclosing the compensation they received.
Celebrity endorsements for crypto projects aren't always a red flag, but it often depends on the project and the credentials of the famous person, said Robert Hoogendoorn, head of content at blockchain analytics platform DappRadar.
“For example, various sports heroes have backed fantasy sports platforms,” Hoogendoorn told Cointelegraph, adding that there are over 1,673 memecoins listed on CoinGecko with a combined market cap of around $38 billion.
However, that only scratches the surface, as less than 1.5% of the 1.7 million tokens launched via Pump.fun since January ever reached a total value of more than $63,000.
Since May, several public figures, including Caitlyn Jenner and Jason Derulo, have launched and promoted crypto tokens using their likeness.
Crypto analytics firm Bubblemaps claims to have witnessed onchain insider activity during several of these coin launches, with some wallets profiting millions of dollars.
Overall, Hoogendoorn said it’s often safer to be skeptical of a project backed by a celebrity, especially “when they praise a certain token you’ve never heard of, you know the project paid $50,000 for the shoutout.”
However, he added that there are exceptions out there, depending on the context.
“In general, celebrities promoting crypto projects tends to be a major red flag, and we’ve seen that with various celebrities, tokens and NFT [non-fungible token] collections,” he said.
“However, celebrities genuinely backing a project through investment rounds should not necessarily be considered a red flag. There’s a difference there.”
A celebrity advertising a crypto project could be a red flag in certain cases, said Ken Gamble, executive director and chairman of international private intelligence and cyber investigations firm IFW Global.
In his experience, there are a staggering number of fake celebrity crypto ads shilling products online that are scams, stealing famous people's likenesses and voices through deepfake technology and artificial intelligence.
In these cases, the celebrity might not even know they have endorsed a product. As was the case with billionaire Australian mining tycoon Andrew Forrest.
In July of 2022, he launched legal proceedings against Meta over Facebook ads that used deepfakes of his image to promote scam crypto schemes after discovering them online.
“As a subject matter expert in international cyber fraud, I have never seen a genuine endorsement of a crypto project by a real celebrity,” Gamble told Cointelegraph.
Australia’s competition watchdog, the Australian Competition and Consumer Commission (ACCC), has also launched legal action against Meta over the prevalence of fraudulent celebrity scam ads on the platform.
The ACCC says over
Disclaimer:info@kdj.com
The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!
If you believe that the content used on this website infringes your copyright, please contact us immediately (info@kdj.com) and we will delete it promptly.
-
- Fetch.AI (FET) Price Prediction 2022-2025: Can FET Break the $1.77 Barrier?
- Sep 22, 2024 at 06:15 pm
- Fetch.AI [FET] has surged over 22% after breaking out of its macro downtrend, approaching the crucial $1.77 resistance level.
-
- double jump.tokyo launches “SG Verse” L2 blockchain for SEGA’s IP
- Sep 22, 2024 at 06:15 pm
- Tokyo FinTech Norbert Gehrke Follow Listen Share double jump.tokyo announced the development of “SG Verse,” a gaming-focused Verse Layer (L2 blockchain)
-
- The Pyth Network Introduces Oracle Integrity Staking (OIS) to Enhance Data Quality
- Sep 22, 2024 at 06:10 pm
- The Pyth Network has introduced Oracle Integrity Staking (OIS), a feature designed to enhance accountability among data sources by implementing staking rewards and penalties.
-
- Solana Primed for Major Price Resistance at $154, Must Avoid Rejection to Prevent Crash to $85 – Analyst Ali Martinez
- Sep 22, 2024 at 06:10 pm
- Prominent altcoin Solana was one of the major headliners recently, notching an 8.22% gain in the last seven days, according to data from CoinMarketCap.
-
- Solana Foundation Dissolution Debated at Breakpoint: Tear It Down or Hold the Line?
- Sep 22, 2024 at 06:10 pm
- During the final debate of this year's Solana Breakpoint crypto conference on Saturday, Solana Foundation Executive Director Dan Albert and the
-
- Franklin Templeton Expands Its On-Chain Money Market Fund to the Avalanche Network
- Sep 22, 2024 at 06:10 pm
- Franklin Templeton, a global investment firm managing $1.6 trillion in assets, has deepened its involvement in blockchain technology by extending its on-chain money market fund to the Avalanche network.
-
- Aptos, Sei Network, and Rexas Finance: Viable Contenders to Dethrone Solana
- Sep 22, 2024 at 06:10 pm
- The race to dethrone Solana as the leading platform for cryptocurrencies is getting stiffer with Aptos, Sei Network, and Rexas Finance being viable contenders for the future.
-
- The Top Three Cryptocurrencies To Invest In The Next Decade: Rexas Finance, Dogecoin, and Polygon
- Sep 22, 2024 at 06:10 pm
- Interestingly, XRP, one of the most anticipated cryptocurrencies a few years back, failed to secure a place on the list.
-
- Dogecoin Gearing Up For A ‘Bullish Breakout’
- Sep 22, 2024 at 06:10 pm
- Dogecoin (DOGE) finds itself at a pivotal turning point after weeks of fear and uncertainty across the crypto market.