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By Kapil Rajyaguru
Cryptocurrencies have been generously promoted by top Hollywood celebrities and athletes.
However, several of these celebrities have suddenly found themselves under the scanner of the law in recent months.
Most notably, Kim Kardashian and Floyd Mayweather were served with class action suits for promoting the cryptocurrency EthereumMax (EMAX).
The United States Securities and Exchange Commission (SEC) fined Kim Kardashian $1.26 million because she failed to reveal that she was handsomely compensated for promoting the EthereumMax
The EMAX project has tanked since then, and the investors who put money into the project have been left holding the bag. This is how a pump and dump scheme works.
Recently after the collapse of FTX, several names have also come up in the class action lawsuit against FTX. These names include Shaquille O’Neal, Gisele Bundchen, Naomi Osaka, Stephen Curry, Larry David, and Tom Brady, who all appeared in FTX commercials.
If we look at India’s stance on this matter then last year, when the crypto market was soaring, many of the crypto exchanges in India reached out to Bollywood celebrities to endorse their brand. Popular Indian crypto exchanges such as CoinDCX, CoinSwitch Kuber, Bitbns, etc approached Bollywood actors like Ayushmann Khurrana, Ranveer Singh, Disha Patani, Anupam Kher, etc. to promote their platforms on national television and social media. However, in May 2022, the capital market regulator, Securities and Exchange Board of India (SEBI), proposed a ban on Indian celebrities promoting cryptocurrencies.
So, the bottom line is, if celebrities endorse a crypto service or product, they must also highlight the financial risks that come along with these assets. Else, they risk attracting the long arm of the law since such endorsements could be misleading to the public at large.
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