NerdWallet: Why crypto has been a sticky spot for celebrity endorsements

by | Oct 25, 2022 | Stock Market

This article is reprinted by permission from NerdWallet. The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. Cryptocurrencies’ journey this year from the moon back to Earth has slammed the brakes on a peculiar phenomenon of the 21st century: the awkward celebrity crypto endorsement.

Matt Damon, Larry David and Tom Brady have all gone quiet on crypto as advertising dollars in the industry have evaporated alongside investor interest, according to recent reports. And Kim Kardashian couldn’t have even talked about crypto if she had wanted to, as the Securities and Exchange Commission has barred her from promoting crypto for three years. The SEC takes notice This latest move from the SEC serves as a reminder that Super Bowl commercials and celebrity social media accounts may not be the best source of investment advice. People who bought in at the height of the crypto craze may not recoup their investments for years — if ever — depending on the coin they bought. And some of the stars who signed on to promote risky digital assets may now wish they had steered clear. Under Kardashian’s settlement with the SEC, the ubiquitous influencer also paid a million-dollar fine and forfeited $250,000 — which she was allegedly paid to talk up the obscure token EthereumMax through Instagram — plus interest. (Kardashian admitted no wrongdoing.) Meanwhile, EthereumMax is trading for less than a millionth of a cent. That’s down about 99% from the high it hit shortly before Kardashian began promoting it in June 2021. Celebrity endorsements exist throughout society, from car commercials to medical devices and political campaigns. But when Joe Montana talks up Medicare plans, the SEC won’t come knocking. Crypto, on the other hand, has been a particularly troublesome spot for paid spokespeople in part because of the sector’s reliance on hype to fuel its rapid growth — and the explicit rules …

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