Ad watchdog warns celebrities for running misleading NFT collections

Since a flashpoint in early January, a stumbling market and a litany of foul play, some ugly truths about the NFT market have been revealed, leading Truth in Advertising (TINA), a non-profit consumer advocacy group, to try to take action going forward by the slow-moving hand of the law.

First up on TINA’s hit list: celebrities. TINA sent out letters to a total of 19 celebrities, informing the recipients that their promotion of various NFT projects is misleading, as they have a “material connection to the NFT companies they promote”. Pursuant to the FTC Act, these communications must be disclosed in their entirety in connection with any approval.

Unregulated space – Justin Bieber and Reese Witherspoon, both advocates for the NFT space, albeit in very different ways, were among the list of celebrities approached by TINA, though the nonprofit had sent letters to their respective legal teams as early as June 10 .

During the feverish rise of the crypto and web3 boom, it seemed like well-hyped NFT collections were dropping left and right. However, for all these projects it was quite common to witness a quick collapse. After a public-facing figure endorsed or raved about a specific digital collectible, the project itself failed to materialize or underwent a complete blanket pull.

But A-listers are different; they can’t just attach their face and reputation to an obvious scam, right? The short answer is yes, but in the case of Bieber and Witherspoon, web3 ventures haven’t always been entirely feasible.

Bieber had been promoting a project called inBetweeners (nothing to do with the raunchy British teen comedy) across his social channels, urging his followers to “join the community” – one that the artist had a vested interest in participating in, noting he would “pop on Discord one of these days.”

Normally, it would be fine to do this, but Bieber failed to acknowledge that he was a partner with the company behind the collection, according to the site. Getting people to buy into this project ultimately provides a financial benefit, AKA something that should be disclosed.

Witherspoon has been promoting the World of Women NFT collection, which claims to celebrate “representation, inclusion and equal opportunity for all,” namely above her Twitter account. Again, despite having a partnership with the organization behind the collection, she failed to include this caveat in her endorsements.

While TINA’s stance comes from an established place – celebrity endorsements such as these are hugely influential and tend not to address the potential risks associated with the NFT space – the move seems a little overdue. Celebrities have been pushing NFTs for a while now, and any potential leverage they’ve wielded over their followers’ decisions to join the space has likely been maximized.

On the bright side, financial fallout and fraud may not be a major problem for a long time. While interest in blue-chip gatherings like Bored Ape Yacht Club trudges on, it remains to be seen how much juice NFT mania has left.