17 celebrities have been warned by ‘Truth in Advertising’, the consumer watchdog group, regarding the shilling of NFTs. The list includes Snoop Dogg, Paris Hilton and Tom Brady, among many others. Right now, there has been no official involvement from the FTC (Federal Trade Commission), but they could potentially get involved if bad habits continue.
Who is Shilling NFTs?
There is a list of 17 celebrities who the watchdog group has warned for their shilling behaviours within NFTs. These behaviours are often looked down upon anyway. The list is as follows: DJ Khaled, Drake Bell, Eminem, Eva Longoria, Floyd Mayweather, Gwyneth Paltrow, Jimmy Fallon, Logan Paul, Madonna, Meek Mill, Neymar Júnior, Paris Hilton, Shaquille O’Neal, Snoop Dogg, Timbaland, Tom Brady, and Von Miller.
What is Shilling?
For those who don’t know, “shilling” is a term commonly used in the cryptocurrency and NFT space. It means, simply, “promoting” a project of any kind. Often, it is done by celebrities for large figures of money. It will be posted on various social media platforms.
Shilling is often looked down upon as being wrong, as the advertising is done implicitly. This means that the advertiser, often a celebrity, will not directly say that you should buy this coin or that NFT collection. But they will tell you the profits that they have made, or how they really like the project, for example.
What’s Wrong with Shilling NFTs?
The watchdog group took it upon themselves to warn the celebrities, before the FTC potentially step in regarding shilling NFTs. Put simply, what they’re doing wrong is not disclosing their connection to given NFT projects when promoting or endorsing them. This violates FTC guidelines. For example, if a celebrity has a profit share or ownership percentage in a project, and they don’t disclose that, that’s where the issue arises.
A Preview of the Letter
A public exempt from the original letter was released as a part of a BuzzFeed article:
“We have found that celebrity NFT promotions is an area rife with deception, including, but not limited to, a failure to clearly and conspicuously disclose the promoter’s material connection to the endorsed NFT company, as well as the omission of other material information, such as the risks associated with investing in such speculative digital assets, the financial harm that can result from such investments and the personal benefit(s) the promoter may gain by virtue of the promotion(s).”
Will the FTC get involved?
Right now, the answer is no. However, if they are aware of what’s going on through the NFT shilling, and it continues, a case could rise. The FTC has focused hugely before on advertisements, particularly unethical Instagram ads, from celebrities and influencers, including the Kardashians. This case was so big that they changed the rules and laws on social media advertising.