Celebrities Shilled Crypto at the Top. Can They Learn for Next Cycle?

Moonpay, a crypto payments provider, runs a celebrity crypto concierge service to help the rich and famous acquire NFTs and other digital assets without getting their hands dirty.

But when public figures endorse crypto projects with tokens whose prices pump and tank, it not only seems shady, it’s potentially illegal.

MoonPay’s client roster includes Hilton, actress Gwyneth Paltrow, artist Post Malone, Madonna and others. Essentially, the company is working with the idea that NFTs are the “future of consumer engagement,” said Moonpay spokesperson Justin Hamilton.

“For major holders of intellectual property — celebrities, musicians, entertainers and athletes — the way that they are going to use this technology will be disconnected from market trading realities,” he said.

That may be true in theory, but there’s a reason crypto companies and projects seek to tie their brands to familiar and popular faces.

As bitcoin was retreating from dizzying record highs last December, Actor Matt Damon appeared in a buzzy Crypto.com advertisement during the Super Bowl and said, “fortune favors the brave.”

A few months earlier, with the crypto bull market in full swing, film star Reese Witherspoon in a now-deleted post tweeted: “Just bought my first ETH! Let’s do this #cryptotwitter.” ETH was worth almost $3,900 at the time and now trades for half that. Witherspoon also touted a World of Women NFT.

Earlier still, NFL legend Tom Brady founded his own NFT (non-fungible token) marketplace, Autograph. And like Damon, Brady also marketed a crypto exchange, FTX, alongside his wife, model Giselle Bündchen. 

Heiress Paris Hilton then dubbed herself “The Queen of the Metaverse” in January after hosting DJ events in Roblox, bagging blue chip NFTs such as Bored Ape Yacht Club, and even creating her own.

The same thing happened during the mania of the last cycle, when Katy Perry debuted her “crypto claws” on Instagram — nails emblazoned with digital asset logos including bitcoin, ether and litecoin.

Despite the unfortunate timing of these endorsements, and whether the celebrities truly believe in — or even understand — crypto, their clout helped lend mainstream legitimacy to the industry.

“They know that they’re constantly going to have to push the envelope to invent new ways to create community, to create buy-in, to create loyalty,” said Hamilton. “Many of them think that NFT technologies will be the way to do that.” 

Effects of the bear market 

Despite the market downturn, rapper Snoop Dogg told CNBC that the crypto winter “weeded out all the people who weren’t supposed to be in the space and who were abusing the opportunities that were there,” during the NFT.NYC conference in June.

MoonPay launched HyperMint during the same event, an NFT distribution platform that’s already worked with Universal Pictures and street artist Alec Monopoly.

Monopoly — born Alec Andon — and his brother and manager, Avery Andon, are planning their own concierge-like platform for high-profiles and celebrities who want to foster NFT communities. When asked what he thinks about celebrities jumping in during crypto winter, Andon said:

“There was that moment in the beginning when a couple of celebrities got lucky and made big bucks off of cash grab releases. But I genuinely think those days are done,” he said, pointing to singer Chris Brown’s recent attempt.

“Nine out of 10 celebrities, if they were to do an NFT release today, would fail,” Andon said.

Brown released the Breezyverse collection of 3D animated Brown avatars at the start of July. Only 350 people have bought into the set of 10,000, as seen on OpenSea at the time of publication. Less than 13 ETH ($23,600) has been spent in total.

Web3 enthusiasts “really expect you to be an active member of their community and to really give a part of yourself for the project,” for example through weekly AMA chats or Instagram live chats, according to Andon.

“I think that it’s just such an in depth, exhaustive [process] that a real, true NFT project requires that most celebrities are not willing to make that commitment,” he added.

Marketing crypto tastefully is still possible

Geoff Renaud, chief marketing officer of the marketing agency Invisible North, echoed that sentiment. 

“You see a lot of love and support from the Web3 community when people come for the right reasons, and the claws come out when endorsements are insincere, [Damon’s] Crypto.com ad being probably the most famous example,” Renaud said.

Still, he pointed to FTX’s “great job partnering with talent in creative and authentic ways. FTX “brilliantly cast” Curb Your Enthusiasm star Larry David in its own Super Bowl commercial.

FTX leveraged David’s trademark indifference to undersell crypto, unlike Crypto.com’s bullish narrative, and practically the opposite of Kim Karashian’s basic Instagram advertisement for SafeMoon rip-off EthereumMAX, which is now almost worthless.

“[FTX] made their athlete partners like Tom Brady and Steph Curry stakeholders in the company. The partnerships are always ‘on,’ and the athletes seem personally engaged, which is really rare,” Renaud said. 

Celebs must ask themselves if they’re getting paid to promote NFTs

In any case, Renaud advised public figures to stay cautious about what they’re promoting. Referencing the ICO (initial coin offering) “craze” of 2017 and 2018, Renaud noted there’s still ongoing litigation over “empty celebrity promotions” from that era.

Most recently, the law firm Scott+Scott claimed that Bored Ape Yacht Club creators Yuga Labs used celebrity promoters and endorsements to inflate the price of its NFTs by overpromising high returns. Yuga Labs could face a class action lawsuit.

“It’s a real shame that you can be dragged into a lawsuit just because you’re excited about a piece of digital art that you own,” Renaud said.

Kayvan Ghaffari, head of legal at NFT art marketplace MakersPlace, reasoned that it’s too soon to tell the exact regulatory implications, but public figures must ask themselves: “Am I receiving any sort of financial benefit from this NFT?” 

“If the answer is yes, the FTC [Federal Trade Commission] will start to enforce the law,” Ghaffari said.  

He added that federal agencies such as the US Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC) will emerge as primary NFT watchdogs.

19 celebrities have been warned by consumer watchdog group Truth in Advertising against shilling NFTs, Snoop Dogg, Paris Hilton, Tom Brady and many others were called out for “a failure to clearly and conspicuously disclose the promoter’s material connection to the endorsed NFT company.”

There has been no official involvement from the FTC, yet.

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