Celebrity Crypto Endorsements

By Adrian Cruce

Celebrities are becoming more involved with the cryptocurrency industry by advocating crypto and non-fungible tokens (NFTs), as well as taking part in social initiatives to raise awareness of these digital assets.

Unfortunately, their endorsements can lead to misinformed investors being misled into investing, while when promoting cryptocurrency considered securities by federal regulations it can violate those regulations.


The bankruptcy of crypto exchange FTX may have left many celebrities who had been paid to endorse its business feeling embarrassed, yet its effects could revolutionize how cryptocurrency industry operates. With increased scrutiny on platforms and increased calls for tighter regulations coming out of this bankruptcy filing, entrepreneurs may also need to innovate new solutions for security and decentralization, especially on exchanges where investors require greater protection of funds.

Sam Bankman-Fried was at his most prolific when it came to promoting FTX. To promote it, he surrounded himself with A-list celebrities and celebrity athletes in order to increase business, buying the naming rights to NBA teams and MLB stadiums, signing multi-year deals with League of Legends developers and paying Tom Brady, Gisele Bundchen and Steph Curry (now an NBA star) to appear in “Are You In?” commercials for his company.

Now, celebrities who promoted FTX are facing legal action for failing to disclose their financial ties to the company. The Texas State Securities Board is conducting an investigation into whether these celebrities breached state law by failing to reveal endorsements for FTX and related entities.

Celebrity endorsements may be effective at drawing new customers in, but they might not always be prudent for investors. The SEC has cautioned celebrities about endorsing cryptos that haven’t registered as securities – those who violate SEC rules could run the risk of fines or legal action by the federal agency.

Investors left with millions in losses from FTX’s collapse are taking legal action against its founder Sam Bankman-Fried and celebrities featured in its advertisements to recover unspecified damages from them.

Investors are also filing lawsuits against several prominent executives at FTX, such as CEO Ryan Salame and Nishad Sing – two executives who worked there and have since left. Their suits allege they misled investors intentionally or through negligence; as a result, massive civil and criminal penalties could follow these suits.


Cryptocurrencies continue to explode in popularity, yet also pose risks to investors and celebrity endorsers alike. A recent ruling by a federal judge highlights this fact, emphasizing the need for celebrities and influencers to exercise caution when endorsing risky investments such as Initial Coin Offerings (ICOs). A lawsuit filed by investors who were misled into investing in EthereumMax (EMAX), claims they believe is fraudulent as it failed to disclose financial relationships between endorsers and their company and failed to perform proper due diligence prior to endorsing tokens promoted by influencers who promoted them and failed due diligence checks before endorsing it tokens by celebrity endorsers and did not undergo sufficient due diligence before endorsing them tokens promoted them for sale by celebrities/influencers/influencers/influencers/influencers/influencers promoted them tokens promoted by them (i).

In the FTX case, celebrity influencers allegedly promoted EMax tokens of FTX to their followers on social media, promising substantial returns by purchasing and selling. Prices then skyrocketed only to drop sharply thereafter leaving investors with practically worthless digital assets. Plaintiffs’ attorneys claimed these statements were deceptive and violated state consumer protection and securities laws.

The court rejected the defendants’ arguments that plaintiffs could not reasonably rely on social media posts from celebrities to make investment decisions, ruling instead in favor of Scott+Scott’s assertion that promoting cryptocurrency without disclosing compensation and having an impartial basis for belief was unethical conduct. Now, the case will move onto its next phase where plaintiffs must establish that they suffered damages.

No matter the outcome of litigation, this ruling sends a strong signal to influencers that they must disclose any compensation received and any affiliation with crypto projects they promote. Furthermore, courts will likely follow FTC endorsement guidelines when assessing whether celebrities misled consumers.

Though this ruling was devastating to FTX, it’s not alone; several celebrity-backed cryptocurrencies have been involved in class action lawsuits brought by the SEC over unregistered securities in the cryptocurrency space – such as rapper DJ Khaled and boxer Floyd Mayweather promoting unregistered securities like Centra Tech’s initial coin offering. Paul Pierce even settled out of court with them.


The cryptocurrency market’s collapse has drastically decreased celebrity crypto endorsements. Actors such as Matt Damon, Larry David and Tom Brady have all fallen silent about cryptocurrency; Kim Kardashian is currently being sued by the SEC for endorsing crypto assets through her social media pages and Super Bowl commercials – this serves as a timely reminder that celebrity social media accounts may not provide accurate investment advice.

Non-fungible tokens (NFTs) are digital creations that can be sold as part of a blockchain platform. Each NFT has its own identifier attached to it – known as an ERC-721 token – providing proof of ownership and an opportunity to sell. NFTs can be used to create artwork or secure digital creations that would otherwise lack value in the real world.

Celebrities have previously promoted NFTs through paid advertising campaigns or via Instagram posts, while also backing these funds with personal funds. One such NFT backed by celebrities is Bored Ape Yacht Club, offering users access to virtual community and exclusive swag.

Popularity of NFTs may have increased, yet some experts argue they may not be suitable investments. A recent joint study from University of Nevada, Reno and Vanderbilt University explores how celebrity endorsement affects an initial coin offering’s (ICO) success as well as whether NFTs with celebrity support are more likely to be scams.

Researchers conducted this research using data collected from NFTs and other ICOs that have been publicly disclosed, and found that celebrity endorsements did not increase either the amount an ICO raised or its number of investors; indeed they may even reduce investor trust in its project. As a result, researchers suggest celebrities be wary when endorsing NFTs, disclosing any financial ties to companies they endorse to help investors make informed decisions and avoid being mislead by celebrity marketing techniques; additionally they advise they refrain from touting NFTs as alternatives to traditional investments such as stocks or mutual funds;


Celebrities can draw lots of attention to a crypto project, but their endorsement may not always be helpful. Sometimes celebrity endorsement can even do more damage than good; for example, Tom Brady can afford to take risks in his investments, whereas average investors likely can’t. It is therefore imperative that investors do their own due diligence prior to investing in any crypto ventures.

Initial Coin Offerings, or ICOs, have emerged as a new investment vehicle for blockchain projects. Similar to an initial public offering (IPO) for stocks, an ICO raises funds for the creation of new businesses or platforms by selling tokens to investors who then trade these on a centralized exchange. Celebrity endorsers have often been accused of endorsing untrustworthy ICOs; unlike paid spokespeople though they must disclose when receiving compensation to promote something.

This case against FTX and CEO Sam Bankman-Fried isn’t the first time celebrities have been accused of promoting fraudulent cryptocurrency products. Recently, Floyd Mayweather Jr. was fined by the Securities Exchange Commission (SEC) for promoting EthereumMax token without disclosing his payment from company; other celebrities who promoted crypto products include tennis star Naomi Osaka, MMA fighter Larry David, and NFL quarterback Tom Brady – among many more. If successful in its action against FTX and Sam Bankman-Fried it could set precedent that holds celebrities responsible for any products they promote in future proceedings against other celebrities who promote crypto products.

Celebrity endorsements can increase cryptocurrency demand, but they may also lead to scams and money loss for investors. To prevent scams, do your research before investing in an initial coin offering (ICO). Cryptocurrencies should make up only a small part of your overall financial portfolio and it’s best to invest with a reputable firm with low fees and minimums as well as consider using a robo-advisor which can assist in finding suitable crypto investments for you – investing in dubious projects could cost thousands so be wary!