Truth In Advertising.org (TINA) has notified 17 celebrities promoting NFTs and digital art about their legal obligation to disclose any material connection to NFT companies. These celebrities must make public any undisclosed endorsements from NFTs they promote through social media accounts.
The letters referred to the Federal Trade Commission (FTC) rules regarding the “Use of Endorsements and Testimonials in Advertising”. Celebrities endorsing products must state any connections between them and the NFT projects they are endorsing.
The A-listers sent notifications include a host of celebrity NFT influencers; Snoop Dogg, Eva Longoria, Floyd Mayweather, Tom Brady, DJ Khaled, Gwyneth Paltrow, and others. NFT companies such as Bored Ape Yacht Club, Tom Brady’s Autograph, and World of Women are some of the projects cited in the letters.
These letters follow earlier letters sent to Justin Beiber and Reese Witherspoon relating to two NFT projects they regularly endorse, InBetweeners and World of Women.
Celebrity promoted NFTs
The NFT space is booming. We continue to see new use cases for NFTs, and one US Government report recently estimated that the NFT market could reach $130 billion by 2030.
Therefore, it is no wonder that so many are entering the space. Almost every day, we see another celebrity jumping on the NFT bandwagon. However, many of them are not abiding by the statutory and regulatory framework of FTC law, which includes a personal relationship as one of its disclosure requirements.
This means that some celebrities promoting NFTs are not properly disclosing their material connection to the NFT collections they are promoting.
Furthermore, some celebs are marketing NFT projects in which they have a personal stake without stating the speculative nature of investing in digital assets and the monetary losses that can result. Many vulnerable consumers have found to their cost the grave financial risks associated with the hype surrounding NFTs.
A consumer alert published by TINA stated, “NFT investment decisions should not be based solely on celebrity endorsements. Consumers should aways conduct their own research before purchasing these risky digital assets.”
Justin Beiber scolded for promoted nfts
Justin Beiber’s legal team received a letter on June 10th stating that he has been promoting an NFT company, InBetweeners, without disclosure of his links to the company.
In the letter, TINA points out that Beiber is named, as a partner on the InBetweeners website about us page. They then refer the legal team to tweets from Bieber promoting the NFTs without any reference to his ties to the NFT company.
In a reply, Beiber’s legal team denied any wrongdoing but added, according to the article, that Justin would “update his post concerning InBetweeners in order to further underscore his widely publicized connection with the company.”
Beiber or his team made no changes to the posts.
Afterthoughts
Many NFT buyers see these promos and take them as investment advice, trusting their idles. Consumers deserve to know whether or not their favorite celebrities have a vested interest in the NFT collections they are promoting.
Finally, according to long-standing FTC law, all connections should be clearly and conspicuously disclosed to the public when promoting products. We agree. Transparency is good for all concerned. Especially, for stars who dread negative publicity. It will be interesting to see how it all pans out. Stay up to date, visit our homepage.
