Celebrities have long been tapped as endorsers in almost every industry. They grace your screens on almost every advertisement in broadcast or occupy a full-page ad of your magazine or newspaper. And the crypto industry though still at an early stage is no exception. This is given the influence of these celebrities on consumers.
But in some cases, their endorsement doesn’t always end well. It all boils down to the authenticity of a project endorsed. Some weren’t too successful and found themselves in hot water because the project turned out to be a scam. First, let’s take a peep on the good and bad side of celebrities as endorsers.
All About Money
We have a long list of celebrities that have endorsed cryptos in the past. One of them was Gwyneth Paltrow who has endorsed crypto exchange Abra in 2018 and also became its advisor. Abra was founded in 2014 by Bill Barhydt, a former software engineer for Goldman Sachs and former director of Netscape. The advertisement was received by high criticism and has even been branded as a shameless ad. For its part, Abra was involved in a handful of controversies. In October 2018, it introduced the Bitwise 10 Crypto Index Token in its platform. It is similar to an ETF or Index Fund that contains a basket of cryptocurrencies instead of stocks. But due to regulatory issues, it was later removed from the platform and all funds were converted to BTC (bitcoin). Regulation has soon caught up with the exchange for allegedly offering and selling security-based swaps to retail investors without registration. It also failed to transact those swaps on a registered national exchange. In July 2020, it was charged by two regulatory agencies, the SEC and CFTC to cease and desist from further violations of the Commodity Exchange Act. The exchange paid a total of $300,000 in civil penalties to both the SEC and CFTC.
Luis Suarez, a professional soccer player who played for the Spanish club Atlético Madrid and the Uruguay national team promoted predictions market Stox in 2017. In 2019, the platform and its founder Moshe Hogeg were sued by a Chinese investor, Zhewen Hu, for over $4.6 million over alleged fraud. The investor has alleged that Hogeg and Stox operator, STX Technologies Limited, misappropriated millions of dollars worth of crypto that had been invested in the company. According to reports, Hu invested a total of $3.8 million worth of ETH (Ethereum) in the crypto firm.
Floyd Mayweather and DJ Khaled were recently fined for allegedly endorsing Centra Tech. The blockchain company was founded by Sohrab Sharma, a.k.a. “Sam Sharma,” Robert Farkas, and Raymond Trapani in July 2017. Sharma was later sentenced to eight years of imprisonment for the purported fraud after conducting a $25 million illegal initial coin offering (ICO).
Mayweather and DJ Khaled endorsed Centra Tech’s ICO on their social media. In a tweet, Mayweather claimed that he already made a purchase and encouraged his fans to invest as well.
“Centra’s (CTR) ICO starts in a few hours. Get yours before they sell out, I got mine.”
DJ Khaled in a post on his social media, claimed that he had received his titanium centra debit card.
The US SEC later filed a case against the duo for failure to disclose the scope of compensation received in exchange for the promotion. Also, according to the agency, this kind of activity is in violation of the anti-touting provisions of the federal securities laws. It was later revealed that Mayweather received $100,000 for his endorsement. He was asked to pay $614,775 in fines: in disgorgement, penalty, and prejudgment interest. The amount he received as payment was almost seven times the fine imposed on him by the SEC. Khaled received $50,000 for his endorsement. Later, he agreed to pay $50,000 in disgorgement, a $100,000 penalty, and $2,725 in prejudgment interest, with his combined fines totalling $152,725 (£120,000). Whew! Not worth it right. Aside from financial losses, well, undeniably this has tarnished their reputation. But that’s not all. The duo was also banned from promoting securities online for 3 and 2 years respectively.
Former action movie star Steven Seagal was also fined in 2020 for endorsing Bitcoiin2Gen. Seagal agreed to pay the SEC more than $330,000 in penalties and interest, including $157,000 that Bitcoiin2Gen had already paid him.
But was there any instance that celebrities endorsed crypto for a good cause? Oh, yes. There is also a handful of that. Let’s take a few examples.
For a Good Cause
Not all endorsements had a bloody and expensive ending. Some celebrities’ involvement with cryptos comes with a good cause. One example of this is Paris Hilton, a social media icon and a Hollywood star that has conducted an auction for a charity cause. In a tweet, Hilton announced that she was able to raise 40 ETH or $17,000 at that time, for the sale of the digital painting of her cat, Munchkin. The proceeds of the auction went to three charities: Los Angeles Regional Food Bank, Meals on Wheels, and Backpack Bed for Homeless.
Boxing legend Mike Tyson’s partnership with Bitcoin Direct has introduced the Bitcoin ATM we know today. This is now a revolution considering his involvement was way back in 2015 where BTC (Bitcoin) was still viewed as a bubble by many. As of January of this year, there are already 14,000 Bitcoin ATMs worldwide.
Former Spice Girls Mel B was the first-ever artist to ever accept Bitcoin as payment. When? As early as 2013. She was definitely born a trendsetter. In one of her statements, she said:
“Bitcoin unites my fans around the world using one currency.”
Roger Ver, one of the first crypto celebrity adopters. Not only did he promote but ventured into numerous crypto projects. He started investing in bitcoin as early as 2011. He invested in crypto startup projects like Ripple, Blockchain.com, Bitpay, and Kraken. His company, Memorydealers was the first to accept bitcoin as payment. His advocacy on the crypto has earned him the moniker “Bitcoin Jesus”. He has made a total donation of $3 million worth of BTC (bitcoin) to the Foundation for Economic Education in 2013 and the most recent in 2021. He has been very active in promoting BCH (bitcoin cash) on his social media account particularly on Twitter.
Celebrity endorsement has even brought some revolution in the crypto world we know today. Not all was in vain. But celebrities have even gone beyond charity works using cryptos. Let’s take a peep at some celebrities that have taken crypto to a new level: adoption.
Celebrities Venture into Cryptos
To be part of the crypto revolution, some celebrities did not only endorse crypto projects. Just like Roger Ver, these celebrities have taken the actor’s lead on adoption. One of them was American R&B singer Akon. Before the end of 2020, Akon pushed through with his plans to build a $6 billion smart city in Senegal, his country of birth. Now, how is this related to crypto? Along with building the smart city, Akon has also launched his own cryptocurrency, Akoin. The smart city will be powered exclusively by Akoin, the digital asset. It was initially available for trading in Bittrex Global crypto exchange on Nov. 11. But the Senegal project is just the start of a new beginning for Africa. Julius Mwale, the principal investor of Mwale Medical and Technology City commented on this matter:
“This is the test ground for akoin before it moves into the Akon city as we start building there next year to literally turn Africa into a cryptocurrency ecosystem within the next decade.”
The Winklevoss twins, Cameron and Tyler, were both members of the United States Olympic rowing team way back in Harvard. They competed in the men’s pair rowing event at the 2008 Summer Olympics as partners. As we all know, the twins sued Mark Zuckerberg over Facebook. Later on, they agreed on a settlement with Zuckerberg. Aside from being athletes, the twins are also known for their tech-savviness. They founded the Gemini exchange in 2014. Their $11 million bitcoin investment made them one of the first bitcoin official billionaires.
Businessman turned celebrity Elon Musk is also known as a crypto investor. His company Tesla has recently invested $1.5 billion in BTC (bitcoin). Also, according to reports, Elon Musk is not only into crypto as an investor. He has also adopted bitcoin as a means of payment. Investors can now buy shares in Tesla using their bitcoin. Tesla is not just into electric cars. The company has recently found a bug in the Bitcoin payment processor and wallet BTCPay Server and also assisted in patching it. A big proof of Tesla and Elon Musk’s commitment to bitcoin.
Celebrities and crypto may come along well. The crypto space has a lot to offer to mankind and if utilized properly can result in more innovation that will extend even to the real world. As more and more celebrities adopt crypto, we will witness its continued growth. But let’s just hope these influencers will use their power for the better good.