This January, the actress Mila Kunis consulted a video with Randi Zuckerberg, Mark Zuckerberg’s sister, to discuss her NFT project, “Stoner Cats,” with thousands of viewers watching from home. The chat is part of an online event organized by the new crypto group for women MyBFF. All evening, speaker after speaker emphasized that savvy women should enter the Web3 world quickly, before men take all the riches. But Kunis took a beat to throw in a warning. “I never wanted people to go into the NFT thinking it was an investment,” she said. “Go into it because you love it, because you think it’s beautiful, because it gives you joy.” She then mentioned, conversely, that the Securities and Exchange Commission would also “go after” them if they presented the NFT as an investment. That’s a surprising admission – in the exploding world of NFT coin celebs, there doesn’t seem to be any regulation at all.
Famous people love and cherish NFT. Some famous types have launched their own projects, like Quentin Tarantino, who is selling NFT based on his original Pulp Fiction the script. Others want to draw attention to the projects they’ve supported, like Bored Ape . Yacht Club. Gwyneth Paltrow, Eminem, Steve Aoki, Jimmy Fallon, Paris Hilton, Shaquille O’Neal, Post Malone, The Chainsmokers, DJ Khaled, Future, Snoop Dogg, Lil Baby, Mark Cuban, Steph Curry and Serena Williams have all posted about them. tailless monkey; Timbaland both own BAYC NFT and have set up a production company for BAYC owners.
Justin Bieber, meanwhile, posted about a picture of a Bored Ape on Instagram in January and now have two in his digital wallet, though it’s unclear if he actually paid for them personally or actually owns them. (Bieber did not respond to a request for comment.) The blog nicknamed Dirty Bubble Media has been document recording some of the weirdness surrounding the celebrity NFT push, following the blockchain movement to theorize that some celebrities might have more financial stakes in the NFTs they’re promoting than they allow, including Bieber. Does he get paid to promote some of the NFTs he has posted about, in free NFTs or regular old US dollars?
We don’t know right now. But let’s say a hypothetical celebrity to be accept a free NFT in exchange for promoting it. If that’s the case, the current Federal Trade Commission guidelines on social media advertising should apply, according to Bonnie Patten, executive director of consumer advocacy group Truth in Advertising. “The law is clear that if you are given an item that you then advertise, you must clearly and fairly disclose that material connection,” she said. Ethan Wall, a lawyer specializing in legal issues related to social networks, also agrees with this view. “The same rules that apply to influencers who get paid to advertise products and services also apply to NFTs,” he said. The hypothetical celebrity would have to disclose that they are promoting a product in the same way that they would have to attach “#ad” or other disclosures to social media posts.
What if a celebrity gets a free NFT from a third-party organization, perhaps some kind of concierge service or marketing agency acting as a middleman? Same agreement — existing guidelines will also apply. Robert Weissman, president of consumer advocacy organization Public Citizen, believes that the basic principles of the FTC’s endorsement guidelines are clear, even though they are not written with the complicated world of the NFT in mind. “One of the core concepts is that people have a right to know when they are advertised,” says Weissman. “Advertisers and endorsers are obligated to make certain disclosures about this effect, as consumers are often unaware they are being advertised.”
So, will the FTC enforce its rules on celebrities and influencers who appear to be promoting NFT without accurately disclosing their financial holdings? It was not clear and the FTC declined to comment on its approach to NFT regulation.
