Truth in Advertising, or TINA, a watchdog organization for consumers, has accused 19 celebrities of endorsing NFT without declaring their affiliation with the projects.
Gwyneth Paltrow, Snoop Dogg, Eminem, Tom Brady, and Floyd Mayweather are just a few of the famous names on the list.
TINA accuses celebrities of NFT deception
TINA has reportedly sent letters requesting the celebrities to quickly declare any material ties they have to NFT businesses or brands they have endorsed.
On their website, the non-profit organization that promotes consumer rights claimed to have looked into “celebrities who promote non-fungible tokens (NFTs) on their social media channels” and discovered that “it is an area rife with deception.”
“The promoter often fails to disclose material connection to the endorsed NFT company,” TINA said.
While no legal penalties have been imposed, TINA.org stated that on Aug. 8, it addressed letters to the celebrities involved detailing their objections and informing them of the possible detrimental effect peddling NFTs can have on the public.
NFTs are digital certificates that are kept on the blockchain and prove ownership of a digital or physical object, typically an artwork, with many high-profile initiatives receiving celebrity sponsorship and promotion.
One of the key concerns expressed by the group in the letters is that the potential financial risks connected with investing in such speculative digital assets are not acknowledged.
Celebs called out for violating FTC guidelines
The advocacy group includes a link to the Federal Trade Commission (FTC) website, where it is stated that influencers must make obvious, unambiguous, conspicuous, and within the endorsement any significant relationships they may have to the products they are promoting.
According to a blog post on TINA.org’s website, the aforementioned celebrities might be infringing on FTC regulations governing influencer standards and the use of endorsements and testimonials in advertising.
There hasn’t been a widely reported instance of a celebrity being fined for endorsing NFTs or cryptocurrency.
A few other famous people, including actor Matt Damon, made headlines when they were featured in advertisements for cryptocurrency items. The actor was mercilessly made fun of and derided for his involvement.
Several class action lawsuits are now pending, most notably against Elon Musk for his support of Dogecoin and Mark Cuban for pushing Voyager crypto products.
SEC warning
In a post on their website in 2017, the U.S. Securities and Exchange Commission (SEC) warned investors about celebrity-backed initial coin offerings.
“Celebrities who endorse an investment often do not have sufficient expertise to ensure that the investment is appropriate and in compliance with federal securities laws,” the SEC said. “Investors should note that celebrity endorsements may appear unbiased, but instead may be part of a paid promotion.”
The SEC asserts that it may be illegal for celebrities and influencers to use social media to persuade their followers to buy stocks or other investments if they fail to disclose the type, source, and sum of any direct or indirect remuneration received.
TINA.org earlier wrote letters to the legal departments of Justin Bieber and Reese Witherspoon on June 10 regarding the celebrities’ promotion of NFTs on social media without disclosing their affiliation with the projects.
On July 1, Bieber’s legal team responded, denying any wrongdoing but promising to update the posts.
While Witherspoon’s legal team contacted TINA.org on July 20, they argued that the actress isn’t getting anything substantial from endorsing NFTs.