MADISON, CONN., Aug. 09, 2022 (GLOBE NEWSWIRE) — An increasing number of celebrities are jumping on the NFT bandwagon, showcasing their digital assets on social media for the world to see. But are they just showing off or do they have a personal stake in the NFT and/or NFT company that they aren’t properly disclosing? Ad watchdog truthinadvertising.org (TINA.org) is seeking answers.
TINA.org has sent letters to a number of celebrities who have promoted NFTs on their social media accounts, including Gwyneth Paltrow, Eva Longoria, Floyd Mayweather, Tom Brady, DJ Khaled and Paris Hilton, informing them that if they have a material connection to the NFT company they are promoting – which can range from a six-figure endorsement deal to the gift of a free product or even a personal relationship – that connection needs to be clearly and conspicuously disclosed as required by FTC law.
The power of a celebrity endorsement is undeniable but it is particularly compelling to Gen Zers, who have been found to be nearly five times as likely as adults aged 41 and over to get financial advice from social media. And though NFTs are often marketed as valuable pieces of digital art, there can be grave financial risks associated with investing in them. According to the U.S. Government Accountability Office, “Many NFT buyers want to resell NFTs for a profit and, while all investments are risky, NFTs might present additional risks because there isn’t any statutory and regulatory framework that is explicitly applicable to them.”
“The fact is that while some of these celebrities are in the financial position to take risks, many vulnerable consumers don’t have that luxury,” said TINA.org Executive Director Bonnie Patten. “Consumers deserve to understand the full picture behind a celebrity endorsement so that they can make fully informed decisions on whether or not to invest in NFTs.”
For celebrities who do have a vested interest, their endorsements are not only biased, but also potentially increase the value of the company and the NFTs that the celebrities own (known as “artificial price influences”).
TINA.org sent these letters two months after warning Justin Bieber and Reese Witherspoon about their undisclosed endorsements for two NFT companies, inBetweeners and World of Women, respectively. Though Bieber’s legal team denied wrongdoing, they stated that his posts would be updated. Witherspoon’s team similarly denied wrongdoing, claiming that she does not derive any benefits from her partnership with World of Women.
TINA.org has also published a consumer alert about celebrity-promoted NFTs.
To read more about TINA.org’s investigation of celebrities promoting NFTs, see: https://truthinadvertising.org/industries/celebrities-promoting-nfts/