News Flash: Taking a celeb’s financial advice could cost you
As if losing money in crypto wasn’t enough, scammers are going after people who were victims of these crooked schemes. Here’s what you need to watch out for.
Following the FTX crypto exchange collapse in November, lawyers filed a class-action lawsuit against former FTX CEO Sam Bankman-Fried and a host of celebrities and athletes.
When public figures are hired to endorse a product personally, they have a legal and moral obligation to investigate the product and its backers. They must ensure that fans are not jeopardized by following their advice. These people are in for some embarrassing and messy lawsuits.
The complaint
David “Big Papi” Ortiz, “Shark Tank’s” Kevin O’Leary, Shaquille O’Neil, Stephen Curry, Tom Brady, Gisele Bündchen and Larry David are among the big names promoting FTX crypto, and now they’re being held accountable.
Complaints against the celebrities allege that:
- The crypto was classified as a security by the SEC, which meant it had to be registered (it wasn’t). By promoting FTX, celebs were pushing unregistered securities.
- They broke the law by not disclosing they were taking money from FTX.
- Celebs failed to investigate the products they promoted and the people behind those products.
While Bankman-Fried faces over 100 years in prison for securities fraud, money laundering and bribery, these celebs most likely won’t see any jail time. They will be hit in their wallets, at least. We hope that’s enough for these celebrities and all social media influencers to learn a lesson.
One celeb was smarter than the rest
Taylor Swift pulled out of a $100 million sponsorship deal with Sam Bankman-Fried’s FTX. According to the lawyer behind the celeb lawsuits, the pop star was the only one to ask about unregistered securities. Swift’s father was an investment banker, so it seems she picked up some good advice.
How to keep your money safe
Cryptocurrency is a risky investment. There are thousands of digital currencies out there, and they all share one thing in common: volatility. Your profits can soar or crash at any given moment due to supply and demand, competition, governance and even social media hype.
It should be common sense, but everyone needs a reminder now and then: Don’t take financial advice from celebrities and influencers.
This doesn’t just apply to cryptocurrency but to any investment. Every single personality promoting the next big moneymaker is getting paid to do so. They don’t have your interests in mind and aren’t always invested in the product, service or exchange themselves.
The cryptocurrency world is full of scams, so you should avoid it altogether, especially now with all the lawsuits and Bitcoin’s value crashing. Never forget the EthereumMax fiasco.
Do your research and speak to licensed financial advisors for help. Don’t give information or money to a stranger from the internet, famous or otherwise.
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Tags: celebrities, cryptocurrency, financial advice, influencers, internet, investment, lawsuits, scams, security, TikTok
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