Celebrities Who Endorsed Crypto, NFTs Land in Legal Crosshairs After Investor Losses
Sports and Entertainment Law attorney Tony Mulrain was quoted in an article published by The Wall Street Journal about a recent dilemma regarding celebrity endorsements of cryptocurrency and non-fungible tokens (NFTs). Celebrities like Madonna and Tom Brady are facing civil lawsuits from investors who suffered losses on digital assets, as well as scrutiny by regulators for promoting the purchase of virtual assets without disclosing their commissions for endorsement. The U.S. Securities and Exchange Commission (SEC) has said that celebrities who promote virtual tokens it considers securities must disclose the nature, scope and amount of compensation they receive. But outside of enforcement actions, the commission has yet to specifically articulate its views on what digital assets fall under these obligations. Mr. Mulrain shared his thoughts on the recent issues.
"When you start talking about money there’s a lot of guardrails put up," he said. "Convincing your fans to buy a certain brand of bleach is not regulated as harshly as if this person put their entire life savings into a security because someone that they value and respect said so."