How Celebrities Were ‘Gamed’ By Crypto Fakes
That star power can sell any type of innovative coin is well demonstrated by the grave-yard of coin deaths, celebrity has endorsed. The hype such star-coin generate at the time of offerings fizzled out in a short space of time, leaving not only the celebrity red-faced but investors poorer by a few thousands.
Marketing strategies have long relied on the personal charisma of celebrities to take on well-established brands. This was true of the cryptocurrency coins as well.
These kinds of promotions for initial coin offerings from TV personalities to international divas became a trend in early 2015s and slowed down by 2017 December when prices fell to $6,000 from the hype-funded days of $20,000 for a bitcoin. Not completely forgotten as a strategy, celebrities continue to promote digital coins and initial coin offerings in the aftermath as well.
One of the first to negate such power-marketing scams was the United States Securities and Exchange Commission itself.
SEC Fake Page
In order to reach out to gullible investors, SEC implemented one such endorsement-led fake ICO page. When investors visited this ‘potential’ digital coin offering, SEC ended the lucrative offer warning how endorsements by celebrities are not critical criteria for investing.
SEC’s message was very clear to potential investors in such fake offerings, “a celebrity endorsement does not mean that investment is legitimate or that it is appropriate for all investors.”
In fact, celebrities are even exploring solo-missions and are extensively touring or using social media for promotion of digital coins.
The celebrities who have been drawn into such promotional activities have been professional athletes to actors and influencers in their chosen industry.
Unknown companies or start-ups found it easy to grab the attention of investors to their coins merely by paying a popular face on TV or the Cinema.
Hilton to Seagal was caught unaware
The most popular fake digital coin promotion was the case of Page 3 hyper-influencer, Paris Hilton. In September she became part of the marketing spiel for Lydian a just launched coin with the famous tweet, “Looking forward to participating in the new @LydianCoinLtd Token! #ThisIsNotAnAd #CryptoCurrency #BitCoin #ETH #BlockChain.”
However, Hilton had to quickly delete the tweet, as the Chief Executive Officer of LydianCoin was once convicted for domestic abuse.
Such offers by other celebrities soon set the regulatory watchdog to issue warnings against celebrity-endorsed ICOs. In particular, an SEC statement which urged caution, observers opine, was directed at Hilton herself.
Though Hilton remained silent by not endorsing such coins, her father did permit investors to participate in an auction for his mansion in bitcoin.
Apart from the Hilton clan, another big name endorsement which went awry was the backing of new coin named, ‘bitcoin,’ by Hollywood star actor, Steven Seagal. The veteran’s fondness for the coin dipped on social media eventually. Regulators in New Jersey found the developers of Bitcoin had faked the coins registration itself, and there was never security for the same in the state. The saga of celebrities choosing to endorse the wrong coin will continue unless investors become vigilant and back only bona fide, ‘security’-backed coins.