Celebrities get into trouble for hiding their “material connections” with promoted NFTs.
Truth in Advertising (TINA.org), a non-profit organization functioning as an advertising watchdog, has sent letters to 19 celebrities calling them out for not disclosing their connections with promoted NFTs.
According to the blog post shared on August 8th, the celebrities have been “deceptively promoting non-fungible tokens (NFTs) on their social media channels”.
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The letters were sent to celebrities like DJ Khalid, Paris Hilton, Floyd Mayweather, Snoop Dog, Eva Longoria, Eminem, and others.
The non-profit organization claims that the above-mentioned celebrities were absent in disclosing their “material connection” to the NFTs or companies which own promoted non-fungible tokens. According to TINA.org, the suppression of this information violates Federal Trade Commission (FTC) laws.
This means that consumers may be unaware that the endorsements are not only biased but also increase the value of the company and the NFTs that the celebrities own (known as “artificial price influences”).
These claims are based on the same advertising rules, which influencers must follow to disclose advertising in their posts. According to this law, influencers must clearly and explicitly disclose their connection with the advertised company.
TINA.org has previously sent similar letters to Justin Bieber and Reese Witherspoon, with claims that celebrities haven’t disclosed their connections with advertised NFT companies, inBetweeners and World of Woman.
Justin Bieber’s legal team denied these accusations but promised to update these posts. On the other hand, Witherspoon’s legal team sent a response claiming that the actress does not receive any benefits from these promotions.
The non-profit organization finished its post by warning users to “view such endorsements with caution”.
As of recently, celebrities are often mentioned in lawsuits related to crypto or NFTs. On August 10th, an American billionaire Mark Cuban was sued for misleadingly promoting bankrupted crypto exchange Voyager. Whereas, Kim Kardashian attempted to dismiss a class-action lawsuit for promoting EthereumMax tokens.
