Tech marketers have been using celebrity endorsements for decades – Microsoft and Apple have relied on this method to flock their goods to the masses since the ’80s – and the cryptocurrency industry, although nascent, is no different.
In the beginning, one could argue the objective was to put a friendly, familiar face on a product to make it more relatable to the average consumer. Today, it’s much more about the cool factor and reinforcing the link created between the endorser, the product, and the consumer.
We live in a world where celebrities, or the new generation of influencers, are paid to sell us anything from miracle diet products, all the way through to makeup, and even cryptocurrencies.
Cryptocurrency, which has long suffered from a branding problem , can certainly benefit from the seeming legitimacy celebrities bring, but it goes without saying that a dodgy partnership can directly impact the market and in turn, peoples’ virtual wallets.
Enticed by generous paychecks, celebrities may enter into an endorsement deal for reasons other than money. They may genuinely love and believe in the product, it may align with their own personal brand, but unfortunately, they repeatedly fail to understand what they’re endorsing.
As a result, the due diligence supposedly carried out by them – or their teams – typically falls short, particularly when it comes to peoples’ health, and in this case, virtual money.
With this in mind, Hard Fork has taken a look at some of the most unexpected celebrity endorsement deals to have taken place in the often unpredictable world of cryptocurrencies.
Mike Tyson
Legendary boxer and convicted felon , Mike Tyson is arguably not the best candidate to rid Bitcoin of its association with the crime underworld, but that didn’t stop him from promoting the cryptocurrency in 2015.
Speaking to CoinDesk prior to the launch of his first branded Bitcoin ATM in Las Vegas, Tyson said he was grateful to be part of the “Bitcoin revolution,” although at the time he admitted he’s “no guru” yet.
Profits deriving from the deal would be split evenly between Tyson and Bitcoin Direct, according to Peter Klamka, the company’s CEO.
Bitcoin Direct first came under fire when the partnership surfaced in the Summer of 2015. At the time, pundits speculated the announcement could be a scam at Tyson’s expense, noting the patchy internet trail of Klamka’s other firm, OTC stock Bitcoin Brands Inc.
This, however, didn’t swerve Tyson’s opinion. The boxer stated he already knew about the cryptocurrency before meeting Klamka, and said he was drawn in by the idea of having options beyond the traditional banking system.
Paris Hilton
Paris Hilton, heiress and ultimate it-girl, took to Twitter in September 2017, to discuss a newly emerging coin called Lydian.
The Tweet said: “Looking forward to participating in the new @LydianCoinLtd Token! #ThisIsNotAnAd #CryptoCurrency #BitCoin #ETH #BlockChain.”
The tweet was deleted but not before reports surfaced suggesting that LydianCoin’s chief exec had previously pleaded guilty to domestic abuse.
Weeks later, the SEC issued a statement , urging caution around celebrity-backed Initial Coin Offerings (ICOs), with many assuming the warning was directed at Hilton.
Hilton remained tight-lipped about the cryptocurrency until the following June when her father Richard Hilton auctioned a $38 million mansion and allowed people to bid with Bitcoin.
Steven Seagal
More recently, actor Steven Seagal (who by the way has endured his fair share of lawsuits ) was brought on by Bitcoiin2gen (B2G) as a worldwide brand ambassador .
Eventually, regulators in New Jersey and Tennessee issued warnings that investors should steer clear of the cryptocurrency endorsed by the faded film star.
An investigation by CoinDesk also revealed ‘Bitcoiin’ resembled a pyramid scheme . Following that, New Jersey’s Bureau for Securities issued a cease-and-desist order describing “Bitcoiin” as an unregistered security, and highlighted the unclear nature of Seagal’s relationship with the project.
Additionally, Tennessee’s Department of Commerce and Insurance issued an alert stating that “Bitcoiin” was not registered as a security issuer with the state, and re-emphasized the fact that investors should “be cautious when investing in cryptocurrencies.”
Seagal tweeted about the project on various occasions using the hashtag #ad, as the project sought to gain traction in the wake of its ICO. But, not long after, Seagal and the company’s founders parted ways with the coin.
It’s not clear why Seagal became involved with the company, but it’s worth noting that his interest in cryptocurrency may have a geopolitical angle. Seagal is a fervent supporter of Russian President – and autocrat – Vladimir Putin, and received Russian citizenship in 2014.
Gwyneth Paltrow
Hollywood royalty Gwyneth Paltrow founded lifestyle brand Goop in September 2008. It started off offering new age wellbeing and lifestyle advice.
The company has been criticized over the years for promoting and selling products and treatments that lack scientific basis, efficacy, and in some instances are recognized by medical professionals as either harmful or misleading.
As previously reported by Hard Fork , Paltrow’s brand published a piece encouraging readers to find out more about Bitcoin and other cryptocurrencies last year. The actress shared the article, which featured an interview with Abra’s CEO Bill Barhydt, with her Twitter followers.
Masked as an explainer on digital currencies and their underlying blockchain technology, the article read like a shameless advertorial for the company, going on to promote the benefits of using Abra over other companies in the space.
This approach is dangerous on several fronts, but I mostly take issue with the fact that it violates the notion of transparency – a rife problem in the wider influencer marketing industry – as it failed to tell readers of Paltrow‘s involvement in the business as an advisor.
Can we learn from their mistakes?
Ultimately, these are just some examples of how companies have leveraged the power of celebrity to make their products more appealing to a mainstream audience, but they help to highlight how some partnerships are beyond questionable.
Investing in a cryptocurrency comes down to choice, and while it’s up to the individual to carry out their own due diligence, seeing a celebrity endorse a product can be misleading at the best of times.
We live in an age where everybody (and their dog) can become a social media influencer, but there’s something to be said about the difference in reach of a blogger, or content creator, and that of a Hollywood A-lister.
Research suggests that, on average, a celebrity endorsement increases a company’s sales by just 4 percent relative to its competitors. One questions whether or not this is all worth it – and the sad fact is that it may very well be for some to look too closely at what they’re peddling.
Celebrities may not understand the technology behind cryptocurrencies but yet, bearing in mind their reach and influence, seemingly have no qualms in telling people to use their hard-earned cash to invest in them. It’s for this reason alone that celebrity cryptocurrency endorsements are capable of being the worst kind of all.
Russian Facebook hit with fake Telegram token ads using Pavel Durov’s face
When new crypto or digital currency projects are announced it doesn’t take long for scams to follow. It appears that Telegram’s supposedly incoming TON token is the latest to be exploited by opportunistic scammers.
According to Russian news outlet Kommersant , fraudsters are using the face of Telegram founder Pavel Durov to push fake TON investment opportunities.
The advert appears to be a sponsored post made under a page called “Successful Investor.” On clicking the post, users are redirected to a website that imitates the appearance of Russian news site, RBC.
Kommersant says the imitation website displays what looks to be an investigative article from RBC , which contains links to another website that promotes the fraudulent investment opportunity.
The second website asks users to input personal data including email addresses and phone numbers. Once registered, the site promises that users will earn 10 to 15 thousand rubles ($150 to $240) per day.
While that might sound conservative (for a scam at least) nothing can promise guaranteed return on investment.
The domain of the fake websites were allegedly registered at the end of August 2019. Seemingly it comes in time to take advantage of Telegram’s TON sale pegged for fall this year. In reality though, many questions remain over how this will happen and what the fall out will be.
One report from the Washington-based Middle East Media Research Institute speculated that the Telegram token would further enable terrorist organizations. This is based on the institute’s discovery that many terrorist organizations are using Telegram and cryptocurrency as fundraising tools.
This case, of scammers using Durov’s face and a genuinely fake news website, should hardly come as surprising. Facebook has been awash with adverts for fake cryptocurrencies in recent years . The Big F was even used by scammers promoting sales of clearly fake Libra tokens.
Bitcoin theft victim sues AT&T for $224M after SIM-swap bungle
Nicolas Truglia, the infamous cryptocurrency con-man already arrested for stealing $1 million in digital assets , is now being sued for a further $81 million by another one of his victims.
Court documents allege Truglia worked with a crew of 25 unnamed individuals to steal $24 million in cryptocurrency from Michael Terpin, an early Bitcoin investor, reports the Register.
Terpin is also reportedly suing AT&T for $224 million, citing gross negligence that led to his financial loss.
In total, Truglia’s gang is believed to have stolen $80 million in digital assets from Terpin and other high-profile cryptocurrency owners before authorities caught up with their scheme.
The nature of the alleged crimes has allowed Terpin to invoke the US Racketeering Influenced and Corrupt Organizations Act, a federal law that allows claimants to sue for triple damages, and it is typically used to punish mafia-type criminal groups.
Cryptocurrency crime syndicate of SIM-swappers
From 2017 to the present, Truglia and his crew, dubbed “OG Users,” are alleged to have used false identification documents to port a victim’s telephone number to a phone under their control – a process known as SIM-swapping.
SIM-swapping allowed the hackers to intercept the victims’ messages, including 2FA codes, leading them to obtain the private keys of their victims.
“On January 7, 2018, Mr. Terpin’s phone with his AT&T wireless number went dead. As Mr. Terpin’s subsequent discussions with AT&T revealed, an AT&T employee on that date had ported over Mr. Terpin’s wireless number to an imposter,” declared Terpin’s lawyers.
The data used by OG Users to defraud victims was noted to have been obtained via phishing or the dark web.
In the aftermath of the alleged $24 million theft, which evidence suggests was his biggest, Truglia texted another individual to brag: “I’m a millionaire. I’m not kidding. I have 100 Bitcoin.”
In the months leading up to his arrest, court documents allege Truglia to have said: “Nobody can get me in trouble. Nobody can put me in jail. I would bet my life on it, actually.”
Reports indicate Truglia is still in custody.
Truglia’s alleged modus operandi was pretty stock-standard for SIM-swappers, and rings true to other recent cases of cryptocurrency fraud .
Private jet broker backs Terpin’s case against Bitcoin Bandit
Documents submitted in support of Terpin’s case by self-employed private jet broker Chris David give a window into Truglia’s world.
David claims Truglia lived in a “$6,000 per month apartment, wore a Rolex watch [said to be] worth $100,000.” He also claims Truglia bragged of plans to purchase a $250,000 McLaren sports car, a private jet, and a Manhattan condominium.
“[…] I quoted [Truglia] a price of $38,000 for the private jet he wanted to hire,” recounted David. “He said that he could pay that amount out of his cryptos, and he showed me his accounts on his computer and mobile phone, totaling tens of millions of dollars.”
“In particular, I saw he had over $7 million of cash in his JP Morgan Chase mobile application, and he had over $12 million of various cryptos in his Gemini account on his computer,” continued David. “One had over $40 million cash value of various cryptos, and the other one had over $20 million […]. Ultimately, Nick did not lease the jet that I offered.”
When David quizzed Truglia on how he came to hold so much cryptocurrency, he was told it came from profits derived from cryptocurrency mining.
David alleges Truglia later confessed to stealing other people’s cryptocurrency, likening himself to “Robin Hood.” Screenshots submitted as evidence even show Truglia (Nick) bragging about his success on social media.
And so continues the tale of NY’s Bitcoin Bandit
Hard Fork learned of Truglia in November, when he claimed he had been beaten up and tortured by his friends , who were apparently intent on stealing his laptop and cryptocurrency wallets.
David’s court submissions reveal a little more about those events, as he was actually one of the accused torturers.
“[Truglia] lured me to his apartment to borrow $50 because he supposedly had lost his wallet. Shortly after I arrived and gave him the money, the police came and arrested me for allegedly stealing Nick’s laptop,” wrote David. “I was shocked and confused since Nick had asked me to take his computer, and I returned it the next morning and we had hung out together two days in a row.”
“This charge was bogus. I spent the night in jail. Eventually, Nick recanted, and the false charges were dropped,” he added.
Just two weeks after the (probably) fake beatdown, Truglia was being held by police after being caught with $1 million in cryptocurrency stolen from a Bay Area exec, and charged with 21 felony counts.
While this latest suit against Truglia is still in its early stages, one can’t help but wonder what ridiculous details are yet to surface.
