New York
CNN
—
With the implosion of Sam Bankman-Fried’s FTX dominating the headlines, celebrities who hawked cryptocurrency are now finding themselves under fresh legal scrutiny.
Tom Brady, Madonna, Gwyneth Paltrow and baseball Hall-of-Famer David Ortiz are just some of the big names facing lawsuits from investors as the crypto world crumbles in the wake of FTX’s fall from grace.
The backlash started earlier this month, when a class-action suit was filed against celebrities, including Jimmy Fallon, Justin Bieber and Serena Williams for promoting Bored Ape Yacht Club NFTs.
NFTs are a crypto-related phenomenon that went mainstream, essentially transforming digital works of art and other collectibles into one-of-a-kind, verifiable assets that are easy to trade on the blockchain. The Bored Ape Yacht Club is a collection of 10,000 pieces of digital NFT art living on the ethereum (eth) blockchain.
None of the celebrities named in the lawsuits immediately responded to requests from CNN for comment.
Tom Brady, Gisele Bundchen and others were sued in November by an FTX investor for their endorsement of the now-disgraced crypto platform, and then Brady and Ortiz were named again in early December in a similar lawsuit for their backing of FTX.
The lawsuits allege that these public figures did not properly disclose their own involvement with digital financial institutions.
Investors in FTX are not expected to be able to recover their money, the company’s CEO testified on Capitol Hill Tuesday. And people who poured money into Bored Ape NFTs are finding their investments aren’t worth what they paid for them, as the NFT market has imploded.
Regulators have been warning investors about celebrity endorsements of risky bets for years.
“Celebrity promotions of cryptocurrencies are fraught with problems,” reads the December lawsuit regarding Bored Apes, which quoted an SEC statement from 2017 cautioning against such endorsements: “Celebrities and others are using social media networks to encourage the public to purchase stocks and other investments. These endorsements may be unlawful if they do not disclose the nature, source, and amount of any compensation paid, directly or indirectly, by the company in exchange for the endorsement.”
Kim Kardashian…
Click Here to Read the Full Original Article at CNN.com – RSS Channel – HP Hero…