Justin Bieber, Paris Hilton Among 19 Celebrities Called for Shilling NFTs

The consumer watchdog group Truth in Advertising (TINA.org) has called 19 Celebrities allegedly promoting non-fungible tokens (NFTs) without disclosing their connection to the projects.

The non-profit consumer advocacy organization said on its website that it investigated “celebrities promoting non-fungible tokens (NFTs) on their social media channels,” and found “this is an area riddled with scams.”

Among the star-studded list are sports stars Floyd Mayweather and Tom Brady, music icons Eminem and Snoop Dog, and several actresses, including Gwyneth Paltrow, all of whom have been sent letters urging them to immediately disclose any material connections they have with the NFT companies. Or the brands they promoted, mentioning:

“The promoter often fails to detect a substantive connection to an authorized NFT company.”

NFTs are digital certificates stored on the blockchain that prove ownership of a digital or physical asset, often a work of art, with many notable projects often attracting celebrity endorsement and promotion.

While no actual legal penalty was attached, TINA.org noted that it sent letters to participating celebrities on August 8 outlining their grievances and advising them of the potential harmful impact that NFT coins could have on the public.

One of the group’s main concerns outlined in the letters is not to disclose the potential financial risks associated with investing in such speculative digital assets.

TINA.org previously sent letters to the legal team of Justin Bieber and Reese Witherspoon on June 10 to promote the NFTs on their social media accounts without revealing their connection to the projects.

Bieber’s legal team responded on July 1, denying any wrongdoing but saying the posts would be updated.

While Witherspoon’s legal team contacted TINA.org on July 20, claiming that the actress does not receive any material benefits from promoting NFTs.

The shilling could violate the FTC’s guidelines

in Blog post On their website, TINA.org writes that the previously mentioned celebrities may be in violation of Federal Trade Commission (FTC) rules regarding the use of endorsements and testimonials in advertising and influencer requirements.

The advocacy group links to the FTC website which specifies that influencers must disclose any material links to brands they endorse, and make disclosures clear, unambiguous, clear and within authentication.

So far, there has been no reported case of celebrities facing legal penalties for shilling NFTs or cryptocurrencies.

Although there are many class actions going on, the best known being against Elon Musk For his endorsement of Dogecoin, the Mark Cuban To promote Voyager crypto products.

A few other celebrities like Matt Damon caused quite a stir when he appeared in an ad promoting crypto products, which led to the actor being relentlessly mocked and ridiculed for his involvement.

Don’t listen to celebrities: SEC

In 2017, the US Securities and Exchange Commission (SEC) issued Investors warn About celebrity-backed ICOs in a post on their website.

“Investors should note that celebrity endorsements may appear unbiased, but may instead be part of a paid promotion.”

Related: Snoop Dogg may be the face of Web3 and NFTs, but what does that mean for the industry?

“Celebrities who advocate investing often do not have enough experience to ensure that the investment is appropriate and compliant with federal securities laws.”

According to the Securities and Exchange Commission, the use of social media by celebrities and influencers to encourage their followers to buy shares or other investments may be illegal if they do not disclose the nature, source and amount of any compensation paid, directly or indirectly.