Rapid developments in the NFT industry have propelled individuals to jump on the bandwagon. Celebrity NFT promotion in particular, so quickly became a trend wave but for reasons different from ordinary consumers. True enough, celebrities are driven by a number of factors that may either be beneficial or harmful to others.
Recently, Truth in Advertising, a consumer watchdog group, sent letters to 17 celebrities, including Jimmy Fallon and Madonna, in order to amplify its purpose of promoting truthful advertising in the NFT space. It reminded them that failure to disclose material connections when posting about NFTs on social media violates Federal Trade Commission guidelines.
The exclusive director of Truth in Advertising, Bonnie Patten, shared, “When it comes to NFTs, some celebrities are able to take financial risks due to their wealth, but many vulnerable consumers don’t have that luxury. Consumers deserve to understand the full picture behind a celebrity endorsement so that they can make fully informed decisions on whether or not to invest in NFTs.”
Truth in Advertising has embodied in their letter the gravity of the roles that celebrities play in the industry. When a celebrity or influencer buys a piece or the NFT collection itself and posts about them on their social media, they run the great possibility of influencing the value of the NFTs. Even if they paid the NFT through their own money, the celebrities are essentially taking their investments to greater heights through their marketing. Some were also gifted by NFT names and communities, virtually pumping more value into an asset without any investment.
Truth in Advertising also expressed in its letter that NFTs are “rife with deception.” In the letter, it said, “we have found that celebrity NFT promotions is an area rife with deception, including, but not limited to, a failure to clearly and conspicuously disclose the promoter’s material connection to the endorsed NFT company, as well as the omission of other material information, such as the risks associated with investing in such speculative digital assets, the financial harm that can result from such investments and the personal benefit(s) the promoter may gain by virtue of the promotion(s).”
Some of the celebrities who received the letter were DJ Khaled, Drake Bell, Eminem, Eva Longoria, Floyd Mayweather, Gwyneth Paltrow, Jimmy Fallon, Neymar Júnior, Paris Hilton, Shaquille O’Neal, Snoop Dogg, Timbaland, Tom Brady, and Von Miller.
Although most celebrities post about NFTs without establishing their material connection with the collection, there are a number of personalities, like Justin Bieber, who has disclosed his relationship with a popular NFT name, Bored Apes. He is currently listed as an investor of the brand. Reese Witherspoon, on the other hand, is a partner of the World of Women of NFTs through her company, Hello Sunshine.
With everything that has happened in the crypto realm, Truth in Advertising reminds individuals to be more cautious in engaging in the trade. To celebrities, it wants to serve as a wake-up call, consistently promoting truthful advertising in competitive trades like the NFT industry.
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