Justin Bieber, Eminem, Snoop Dogg, and Paris Hilton have been named among 19 celebrities who allegedly promoted NFT projects without revealing their associations with the projects, according to an independent, non-profit, advertising watchdog. Reese Witherspoon, DJ Khalid, Floyd Mayweather, Madonna, and Logan Paul have also been named by the consumer watchdog group Truth in Advertising (TINA), that promotes safe advertising across sectors. NFTs or non-fungible tokens are blockchain-based digital collectibles, inspired by real life or virtual objects, and a US regulator has previously warned about the risks of celebrity endorsed NFTs.
The TINA organisation has written letters to these celebrities, highlighting grievances related-to the financial risks they are exposing their followers to, by promoting risky NFTs.
“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’),” TINA said in a statement.
The sales of NFTs reached $25 billion (roughly Rs. 1,84,700 crore) in 2021 as the speculative crypto asset exploded in popularity, data from market tracker DappRadar showed.
Amid the trend of owing NFT catching pace among celebs and other members in the crypto community, the sector was quick to gather the attention of scamsters as well.
Several NFT projects made the rounds on social media, that lured investors into pouring money, and later abandoned these investors.
In fact, even the US Securities and Exchange Commission has warned investors that even celebrity endorsed NFTs should be approached with caution.