Why Celebrities Endorsing ICO Tokens is Not Always an Ideal Combination
Like many other people around the world, countless celebrities have also found their way to the cryptocurrency industry. Thanks to their massive fan bases, they can often be perfect mediums for raising awareness, and some coin developers used this fact to promote their ICOs. All that celebs needed to do was mention the upcoming coin, attract investors, and everyone will profit from it, including said investors.
While this does work in theory, however, there are many pitfalls along the way, some of which can even ruin careers. While this is not always the case, and some celebs did make themselves and certain coins even more famous, there are also those who were not as lucky.
Mayweather & DJ Khaled incidents
There were two big names in the entertainment industry that have had the misfortune to partner up with bad ICOs and end up in trouble. The first one was Floyd ‘Money' Mayweather, a famous boxing superstar, which got connected to a company called Centra Card. The company presented itself as a debit card maker, which was even backed by Mastercard and Visa, supposedly.
Mayweather agreed to collaborate on their ICO project and has posted photos of himself with Centra debit card in hand. Soon enough, the project turned out to be a scam, and Mayweather's involvement caused the boxer numerous issues with the law.
Another celebrity that experienced the same issues is a US-based music producer, DJ Khaled. DJ Khaled was also involved in promoting Centra debit card and has suffered the same consequences as Mayweather. Both ended up charged by the US SEC for unlawfully advertising a fraudulent ICO, as well as for failing to disclose large payments from the company. They were both penalized and ended up having to pay large amounts.
The Crypto Space Is Filled With Scammers
It has been 10 years since Bitcoin was delivered to the world, and numerous other projects followed soon. While the large majority of them is here to try and tackle some real-world issue, improve current technologies, and become a new, dominant form of money — there are also some coins that are nothing more than a scam.
One such project is Bitcoin2Gen, which was launched in January 2018, less than a year ago, when the crypto hype reached its highest point. The project was quickly recognized as a pyramid scheme, and users were warned against it. However, it also became apparent that another celebrity was tied to the project — American actor Steven Seagal. The actor was the brand ambassador of the project's ICO, and the SEC quickly warned other celebrities of the dangers behind being connected to a fraudulent coin.
A similar thing happened to numerous others, such as American actress-turned-businesswoman, Paris Hilton. She made her interest in a project called LydianCoin quite obvious and has mentioned its ICO in numerous tweets. Soon enough, it turned out that the situation was much more complex, and that the CEO of the coin's parent company was involved in serious legal issues. Hilton's tweets disappeared, as well as her support for the project.
Others, such as the US rappers known as “The Game”, T.I., and others also chose to associate themselves with not-so-innocent ICOs. In The Game's case, it was a project that focused on the marijuana industry, while T.I. has his own token that failed recently, after which the rapper and his business partner were sued by investors.
The SEC Makes An Example Of Celebs
While there are many celebrities that ended up being connected with fraudulent projects, Mayweather and Khaled received the most attention, and the SEC decision to charge them with unlawful promotions made an example of them for everyone to see. The SEC warned celebrities multiple times against getting involved with ICOs, and this decision was made to show just how far-reaching consequences can be if celebs decide to make a bad call.
The regulator once again warned investors — celebrities and others — to be wary of ICO. While the advice is good, some experts believe that all that it is necessary is more thorough research prior to getting involved. Being careful is all it takes, and understanding what the projects are about, in detail, can often reveal the scam quite easily.