Hollywoods finest sued for NFTs endorsements
Cryptocurrency investors have had a rough few months. Scams, crypto hacks, and bankruptcies have contributed to one of the worst crypto winters in history. Moreover, the long arm of the law has caught up with several celebrities behind the most sold-out NFTs.
Celebrities suffer the consequences of illegal crypto and NFT endorsement
A few weeks ago, Kim Kardashian was charged with spam promotion and fined millions of dollars. In today’s digital marketplace, it appears that the old-fashioned celebrity endorsement cash grab has gotten a bit more complicated. The majority of recent crypto rug pulls have featured a highly renowned celebrity.
Most recently, Kevin O’Leary, Tom Brady, and supermodel Gisele Bündchen got implicated in the collapse of FTX, along with tennis star Naomi Osaka and basketball players Shaquille O’Neal and Steph Curry. A new class action was filed in federal court less than a month after these celebrities got sued for using their well-compensated star power to promote the now-defunct FTX.
The latest court petition intends to call the Golden State Warriors superstar and a slew of other prominent figures to task for allegedly peddling Bored Ape Yacht Club NFTs in exchange for undisclosed payoffs. It’s an action that puts Kevin Hart, Madonna, Jimmy Fallon, Justin Bieber, Paris Hilton, Serena Williams, DJ Khaled, Gwyneth Paltrow, and many others in an uncomfortable position.
The court filing identifies Universal TV as a defendant in the court document. The prosecutors recognize prominent music manager Guy Oseary as the mastermind behind the alleged multimillion-dollar swindle.
Celebrity influence on NFTs causes investor losses
The promotional campaign of the defendants was enormously successful, producing billions of dollars in purchases and resales. During the relevant period, however, the fabricated celebrity endorsements and false marketing alleging the establishment of an entire BAYC ecosystem (Otherside metaverse) were able to inflate the demand for and price of BAYC NFTs artificially.
Investors purchased these failing ventures at significantly inflated prices due to the celebrity impact. With the Oseary-backed crypto business Moonpay collaborating with Yuga to discreetly sneak payments to the promoting A-list talent, Hart, Fallon, and Paltrow gave BAYC NFTs their stamp of approval without disclosing the frequently substantial compensation they were receiving.
The lawsuit complaint reads:
“During the Class Period, Defendants engaged in a plan, scheme, conspiracy, and course of conduct pursuant to which they knowingly or recklessly engaged in acts, transactions, practices, and courses of business that operated as a fraud and deceit upon Plaintiffs and the other members of the Class […] In truth, the Executive Defendants and Oseary used their connections to MoonPay and its service as a covert way to compensate the Promoter Defendants for their promotions of the BAYC NFTs without disclosing it to unsuspecting investors.”
Before investing in a crypto venture, investors are to perform due diligence. Most importantly, just because a celebrity says an NFT is genuine does not imply it is. Keep in mind that these celebrities stand to gain everything, while investors stand to lose everything.