Key Insight
- Celebrity complicity in crypto scandals has been a common occurrence in the ecosystem.
- New crypto projects would usually remunerate celebrities to publicize their initial coin offering (ICO).
- Three major celebrity scandals defined an era.
Controversial occurrences have never been far from the crypto space.
A revolutionary technology, crypto has been marketed in different ways, such as community growth, digital marketing or social media management, among others.
One of the go-to means is influencer marketing by way of celebrities. These people leveraged their fame and influence to market different crypto via their ICO. However, this doesn’t always go according to plan.
Here is a summary of three important celebrity controversies that changed the crypto game.
Paris Hilton and LydianCoin
In 2017, international businesswoman Paris Hilton threw her support behind LydianCoin, a Singapore-based crypto firm that planned to generate $100 million via its ICO. According to its white paper, LydianCoin aimed to raise this amount by selling 20 million coins at $5 per one. Her announcement went viral when she tweeted, “Looking forward to participating in the new LydianCoinLtd Token.”
The company intended to deliver pre-paid AI-driven digital advertising offers while developing blockchain-based tech and using the Lydian cryptographic token to battle ad fraud. It would offer companies the possibility of accessing anti-fraud properties that are present in MonaChain – a blockchain system for giving ad services to evade ad fraud.
However, the coin didn’t seem to possess significant utility. Plus, LydianCoin was overseen by Gravity4, a company with a background in legal issues and regulatory infractions. Moreover, the VEO, Gubaksh Chahal, had previously pleaded guilty to domestic abuse and was alleged to have breached his probation by assaulting another.
Expectedly, people turned to Hilton for answers, but it didn’t look like she had any, as the influencer later removed her tweet. Since then, she has further ventured into the crypto market, reportedly investing in BTC, ETH, NFTs and the Metaverse.
Steven Seagal and “Bitcoiin”
Legendary actor Steve Seagal got into trouble with the U.S. Securities and Exchange Commission (SEC) for allegedly pledging investors profit from “Bitcoiin,” a token from Bitcoiin2Gen, which was said to be an unregistered security.
He also failed to reveal the remittance he got for advertising the ICO as a brand ambassador.
Seagal was promised $250,000 cash and $750,000 worth of B2G tokens in exchange for his promotions.
They included public social media content, encouraging people not to “miss out” on Bitcoiin2Gen’s ICO, and a press release where Bitcoiin2Gen was called the “superior or more advanced version of original Bitcoin.” It is a claim that did not age well.
He posted messages about the company and the forthcoming ICO to his 107,000 Twitter followers, and 6.7 million Facebook followers, but the project came to naught.
Seagal was later charged by the SEC and agreed to pay $314,000 over two charges and cease promoting any securities for three years.
John McAfee and the Altcoin Pump and Dump
The antivirus software pioneer John Mcafee was indicted with securities fraud over a “pump and dump” crypto scheme.
Federal prosecutors alleged that he and his bodyguard, Jimmy Watson earned almost $2 million by encouraging Twitter followers to invest in crypto like Reddcoin, then selling off their tokens as the value increased.
A U.S. Attorney, Audrey Strauss, said, “McAfee and Watson exploited a widely used social media platform and enthusiasm among investors in the emerging cryptocurrency market to make millions through lies and deception.”
McAfee was accused of utilizing his Twitter clout to artificially inflate the values of altcoins. He was said to have bought large amounts before with BTC, then jettisoned them after his followers had boosted the value.
McAfee and Watson were charged with wire fraud, conspiracy to commit securities fraud and conspiracy to commit money laundering, each count facing five and 20 years in jail. McAfee was later arrested in Spain over evading tax charges in the U.S.
Some months later, he was found dead in his jail cell near Barcelona in an alleged suicide.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.
