Cryptocurrency popularity has boomed in recent years, and celebrities have gotten in on the fanfare. But as criminal activity in the space soars, so has the likelihood that influencer endorsements could lure investors into costly digital-asset scams.
Kim Kardashian, Floyd Mayweather, and former NBA star Paul Pierce are among recent celebrities in the hot seat for their crypto promotions, accused in a lawsuit filed earlier this month in California of using their fame to “pump” a little-known cryptocurrency called EthereumMax as part of a larger scheme to profit themselves and defraud investors.
For Mayweather, the lawsuit marks the second time the boxer has come under scrutiny for allegedly making misleading statements around crypto. In 2018, the Securities and Exchange Commission charged Mayweather and music producer DJ Khaled, for failing to disclose payments they received for promoting investments in initial coin offerings.
Fraudsters have also misused high-profile figures without their knowledge to coax fans, using the faces of famous names including Prince Harry and Meghan Markle, Bill Gates, Mark Zuckerberg and Sir Richard Branson to promote fake endorsement schemes related to bitcoin (BTC-USD).
This makes celebrity promotions of cryptocurrencies particularly vulnerable to criticism as ill-informed investors rush to get in on speculative products because stars they admire are into crypto. It explains why Reese Witherspoon became the subject of backlash after a Jan….
