- The promotion of NFTs by celebrities and influencers causes an increase in their entire collection.
- TINA.org has sent warning letters to 17 celebrities for promoting NFTs on social media without sharing their connection.
- Celebrities who promote non-fungible tokens do not enhance the financial knowledge of consumers.
Truth in Advertising has sent letters to 17 celebrities as a reminder that not revealing material connections while posting anything online is against Federal Trade Commission guidelines.
Bonnie Patten, executive director of the group, shared that certain celebrities take financial risks, thanks to their abundant wealth; however, vulnerable buyers lack the luxury.
Consumers need to know the reality behind a celebrity endorsement, as it will help them make the right decisions about investing in NFTs.
The Truth in Advertising letter mentions that promotion of non-fungible tokens does not mention the risks that come along.
According to the letter, only two celebrities have disclosed the material connections, Justin Bieber and Reese Witherspoon.
Bieber is an investor in the inBetweeners project while Witherspoon’s company Hello Sunshine is associated with WoW NFTs. Both these celebs were issued letters from the same group in the month of June.
The 17 celebrities who have now been issued the letter include-
- DJ Khaled
- Drake Bell
- Eva Longoria
- Floyd Mayweather
- Gwyneth Paltrow
- Jimmy Fallon
- Logan Paul
- Meek Mill
- Neymar Júnior
- Paris Hilton
- Shaquille O’Neal
- Snoop Dogg
- Tom Brady
- Von Miller
Everytime an influencer or celebrity purchases an NFT and shares it on social media, they influence the value of the overall NFT project. Despite paying for the token using their own money, they pump their investment’s value. When a celebrity buys a cheap NFT and displays it on social channels, they increase the token’s value, which yields profit to them upon selling the NFT further.
Things turn even more complicated when they are gifted the NFTs for free by the projects’ owners.
A similar case happened when Jimmy Fallon was given a Moonbird NFT for free. Post that, he updated his Twitter avatar to a cartoon owl’s image. As a result, the price of the NFT collection increased; however, Fallon never mentioned that it was a freebie.