Take Celebrity Endorsements with a Grain of Salt — or Earplugs and a Blindfold

The falling value of crypto has led to a decrease in celebrity endorsements over the last year. Matt Damon, Tom Brady, and countless others have stopped promoting crypto.

They shilled in 2021 and early 2022. But where are they now?

"They left because the market is down bro."

Is that the only reason they left? Really? Do they even know how market cycles work? Or did they use the hype around crypto as an opportunity to get a bag and dip?

What are the chances that celebrities were endorsing the "life-changing" gains of crypto investing just as the speculative mania was nearing its peak.

Well, it's obvious.

At the cycle's peak, the industry was firing on all cylinders. It was an inspiring and lively time to be in the market. Money was flowing faster than lager at Oktoberfest.

We're Going to the Moon

Who? All of us? I'm in! When exactly? I need to feed my family!!!

Here's what some of the Reddit forums were actually like:

AlphaKittie69: "wen lambo?"

Degengoblin420: "I don't know just hodl. Hold the line."

Noob123: "It's gonna keep going up don't sell"

Degengoblin420: "I hope so because I invested my life savings.."

AlphaKittie69: "I'm gonna buy more"

Noob123: "same"

Degengoblin420: "I have a good feeling about DogeElonMoon420!"

Crazy, right?

It's also sad. But retail simply didn't know any better — they just wanted to go to the moon.

Remember the Fortune Favors the Brave slogan from Matt Damon and Crypto.com? We all know Matt Damon is a phenomenal actor, but why did we believe and follow people similar to him like a bunch of sheep? You could ask the same thing about Tom Brady and FTX.

Lessons from the FTX Fallout

Since the collapse of FTX, top athletes have all gone silent — obviously. I mean, who wouldn't?

Any individual with half a brain wouldn't touch crypto with a hundred-foot pole, but celebrities dropped off before FTX collapsed. Well before it, actually.

So, what gives?

A celebrity shilling Coca-Cola or Hugo Boss won't wipe out someone's life savings, but an endorsement of crypto certainly will.

Imagine you're a movie star and you promote a shi*coin to your loyal fan base.

Here's what happens:

1. Fans follow your advice

2. Fans buy with hard earned money

3. Fans lose their hard earned money

And you, the movie star, will have a drink in one hand and a bag of cash in the other as you watch the sunset from your backyard in the hills. 

See the problem? 

It's sickening, unethical, and criminal.

Celebrity endorsements have long been a part of various industries, but the SEC has specific rules surrounding the promotion of cryptocurrencies that "violate the anti-touting provision of the federal securities laws."

The SEC has warned about celebrity endorsements of digital assets and imposed penalties on Floyd Mayweather and DJ Khaled for violating these rules in 2018. Kim Kardashian received a similar penalty for shilling EthereumMax on her Instagram.

You smell that?

That's the sweet smell of victory. Though, it's a small victory because these scams have been going on for years and creators, celebrities, and others have not been brought to justice.

The scams aren’t going to stop either.

Merely appearing in an ad or smiling for a billboard seems unlikely to warrant federal prosecution. For example, Steph Curry promoted FTX and made it clear that he was not an expert.

Okay, fair enough I guess.

Kevin O'Leary, on the other hand, is a credited investor who was talking up FTX like a wingman at your best friend's wedding.

Both Kevin O'Leary and Chef Curry were paid, but only one was a trusted investor and paid approximately $15 million to act as an FTX spokesman.

Oh btw, O’Leary left that part out up until the FTX fiasco.

Mark Cuban, the Dallas Mavericks owner, was also in hot water after being in a class-action lawsuit because he was accused of "duping millions of Americans into investing." The Dallas Mavericks and Voyager Digital, a crypto brokerage and lending firm, had a partnership. Voyager filed for chapter 11 bankruptcy back in July.

Horrible stuff.

So, after all that said, what do these millionaire celebrities and all-star athletes have in common..?

They're still millionaires.

What Matters Most

The manipulated victims of crypto are often those who cannot afford to lose what they have invested.

Even after hearing, "only invest what you can afford to lose."

That message alone is unsettling. Who shills a coin to their subscribers and then gives advice like that? Especially to newcomers? 

I'm not blaming all the market's losses on endorsement deals and disingenuous TV ads, but unfortunately, dabbling turned into life savings for many retail investors.

When the dust settled, it wasn't the millionaires that were left out to dry. It was the people like you and me who had done business with unsecured exchanges and coins with no reimbursement and little to no chance of recovery. 

If there's anything I've learned over the last year, it's this:

• Don't Trust Endorsements

• Buy a Hardware Wallet

• Avoid Degen Forums at All Costs

And to the regulators and prosecutors investigating to determine accountability for wrongdoing, fame should not exempt anyone from facing the consequences.

Author Bio

Chris Murphy is a freelance writer in the Cryptoverse, focusing on Blockchain, DeFi, and Web3. He produces content that is easy to understand and enjoyable for readers while being optimized for search engines. Chris stays up-to-date in the crypto space and is always looking for new opportunities to share his work. For more of his work.