Celebrities Who Supported Crypto and NFTs Are Targeted by the Law Following Investor LossesTable of Contents
Celebrities Who Supported Crypto and NFTs Are Targeted by the Law Following Investor Losses
By CoinUnited.io Research Team
1 min read
Investors who lost money on virtual assets are suing them and other celebrities in civil court, and regulators are looking into the matter, alleging that the public was duped.
In 2018, several of the most significant commercial spots during the Super Bowl, the year's biggest advertising event, were occupied by celebrity crypto advertisements.
Attorney Sean Masson of the company Scott + Scott, who has filed multiple proposed class-action actions, claims that famous people were paid to promote a token without understanding their responsibilities under federal and state laws.
Mr. Masson remarked, "All that rapid, easy money floating around draws individuals."
His December lawsuit took aim at Yuga Labs, a cryptocurrency startup known for its nonfungible tokens.
Madonna tweeted in March, "I finally joined the MetaVerse," alongside a photo of herself with an ape named NFT. The lawsuit claims that two months later, she was compensated with a Bored Ape Yacht Club NFT worth over $500,000.
The spokesman said, "We have never paid anyone, famous or not, to join the club."
Lawyers argue the legal picture is cloudy since the commission hasn't clearly stated its views on whether digital assets come under these duties outside of case-by-case enforcement proceedings.
"The SEC hasn't published its perspective on most, if not all, of the most commonly traded tokens," said Seward & Kissel LLP partner and lawyer Philip Moustakis.
Although several lawsuits have been brought recently, few have resulted in significant decisions thus far.
Judge Michael Fitzgerald of the United States District Court observed, "The court agrees that this case raises valid concerns concerning the potential of celebrities to effortlessly persuade millions of undiscerning followers to buy snake oil with unparalleled ease and reach." Lawyers for Ms. Kardashian argued in a court filing, "Crucially, no named Plaintiff contends that they in fact viewed either Instagram post before acquiring Tokens within the relevant time period."
The plaintiffs sought the court's approval to submit a revised lawsuit in which they more narrowly asserted their case.
Even before the crypto crash, several financial institutions were hesitant to partner with celebrities to promote their goods because of the inherent risks involved.
"When you start talking about money, there are a lot of guardrails put up," said Tony Mulrain, co-chair of the sports legal group at law firm Holland & Knight. Sports agent Leigh Steinberg, who has worked with clients including Patrick Mahomes of the Kansas City Chiefs, has noted that many other product categories provide marketing potential without the same dangers. According to him, "someone may make a tremendous portfolio of effective marketing deals without ever reaching areas that are more laden with hazard."
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