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Chainalysis Report: Crypto Crime Declined by 29% in 2023

Latest Research Suggests Celeb-Backed Tokens are More Likely to be Scam

Posted on May 17, 2023

New research carried out by two Securities and Exchange Commission ex-economists, Sean Wilkoff and Joshua White, shows most crypto projects endorsed by celebrities as likely to be scams.

The research with the title ‘ The Effect of Celebrity Endorsements on Crypto’ found that 26% of the scam tokens issued between January 2017 and November 2019 were promoted by celebrities. That figure has increased to 39% over the last three years. Based on these statistics, the researchers concluded that investors should treat a celeb-backed token as a red flag.

They also suggested that most token creators resort to contracting celebrities when their projects are below par. So they use celebrity glamor to win the trust of investors.

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The research took a closer look at projects endorsed by celebrities like Snoop Dogg, Lionel Messi, Paris Hilton, and Floy Mayweather. White and Wilkoff discovered that these projects did not match the profession of the celebrities, increasing the chances of being a scam.

The pair said a crypto project has less likelihood of being a scam when the promoter’s profession matches the crypto project, such as a football player endorsing a token that will be used to raise funds for the development of a blockchain-based sports betting website.

White advised celebrities to first have a better understanding of a token’s use case before endorsing it. He also mentioned the legal risks associated with marketing scam tokens. As for investors, the researcher asked them not to inject their money into a crypto project purely due to fear of missing out (FOMO). Instead, they should conduct proper research about the project.

Celeb-Backed Initial Coin Offerings (ICOs) Rake in the Cash

Wilkoff and White’s research shows crypto projects raise significant funds through ICOs that are celeb-endorsed. It also boosts the chances of the tokens getting listed on major exchanges.

Data from the research indicate that one token issuer who used celebrity endorsements raised $2 million in excess of the target amount.

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Interestingly, 47% of celebrity-endorsed ICOs did have pre-sales. The researchers said this denied investors crucial data and effective price signals generated during those pre-sales.

Celebrities Charged for Promoting Failed Crypto Projects

Meanwhile, several United States celebrities are facing charges of promoting crypto projects that have left many investors counting losses. A good example is Shaquille O’Neal. The former basketball player is mentioned in a lawsuit that accuses him of endorsing crypto exchange FTX, which went under last year after illegal activities conducted by its leaders were revealed.

Musician Taylor Swift was offered a $100 promotion deal by FTX but rejected it after conducting due diligence. Wilkoff has lauded her in their research.

Further, former football superstar Tom Brady has also been accused by Attorney Adam Moskowitz of endorsing the sale of unlicensed securities. The law expert is seeking $5 billion in damages.


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