Key Insights
- The US FTC is a watchdog investigating misleading crypto ads.
- Celebrities such as Kim Kardashian, Stephen curry, and Tom Brady have been allegedly involved in shady crypto ads.
- Other watchdogs include ASA and ASIC in UK and Australia, respectively.
The US Federal Trade Commission is investigating the allegations that unnamed crypto firms are engaged in misconduct. The misconduct bothers deceptive and misleading advertisements of digital assets. The United States Federal Trade Commission is probing several crypto firms on this premise.
According to a statement from FTC spokeswoman Juliana Gruenwald, the watchdog is investigating “several firms for possible misconduct concerning digital assets.” However, Gruenwald did not reveal details of the firms under investigation or the extent of the probe.
You would recall that since the beginning of the year, deceptive advertising and promotion have been trending in the US. With this latest probe by the FTC, public attention is again cast on the trending topic.
Misleading Crypto Ads Rising in US
This year, the regulatory watchdogs have sanctioned several celebrities after probing their involvement in shady ads. The first instance is that of a reality TV star, Kim Kardashian.
In October, the US Securities and Exchange Commission (SEC) sanctioned the reality TV star for “touting on social media” about the EthereumMax (EMAX) token.
Furthermore, she had to pay a fine for promoting the crypto token without disclosing she was paid to promote the token. Investigation showed that Kim Kardashian received $250,000 to promote EthereumMAX.
Similarly, Tom Brady, the NFL quarterback, and Stephen Curry, the NBA point guard, were reported to be under probe. The report alleged that they were among the celebrities promoting the FTX exchange before it crashed.
The Texas State Securities Board received the report in November and has begun scrutinizing the payment to these celebrities. The investigation details are contained in a report by Joe Rotunda, the director of enforcement at the Texas State Securities Board.
Furthermore, both Tom Brady and Stephen Curry were named in the 15 November class action lawsuit against the collapsed FTX exchange. The lawsuit claimed that the duo, alongside Sam Bankman-Fried “controlled, promoted, assisted and actively participated” in FTX Trading Limited.
Role of the US FTC as a Watchdog
The Federal Trade Commission is an independent agency in the US. The US Government created the watchdog to protect the public from deceptive, misleading, and unfair business practices— through law enforcement, research, and education.
You would recall that earlier this year, this watchdog sent out an alert on a crypto scam with three key components. Significantly, the three components include an impersonator, QR code, and crypto ATM to dupe the victims.
Aside from the FTC, there are other watchdogs with similar responsibilities. They include the United Kingdom-based Advertising Standards Authority (ASA) and the Australian Securities and Investments Commission (ASIC).
