17 famous names have been alerted to NFT shillings by the consumer watch group ‘Truth in Advertising’. The list includes Snoop Dogg, Paris Hilton and Tom Brady, among others. There is currently no official intervention from the FTC (Federal Trade Commission).
Who is Shilling NFTs?
There’s a list of 17 celebrities the watchdog group has warned of for shilling behavior in NFTs. The list is as follows: DJ Khaled, Drake Bell, Eminem, Eva Longoria, Floyd Mayweather, Gwyneth Paltrow, Jimmy Fallon, Logan Paul, Madonna, Meek Mill, Neymar Junior, Paris Hilton, Shaquille O’Neal, Snoop Dogg, Timbaland, Tom Brady and Von Miller.
What is Shilling?
For those who don’t know, “shilling” is a term commonly used in the cryptocurrency and NFT space. It is usually done by celebrities for big figures. Since the advertisement is implicit, the shilling is often viewed as wrong. This means that the advertiser, who is usually a celebrity, will not directly tell you that you should buy that coin or NFT collection. For example. An example of a shilling where media personality and entrepreneur Paris Hilton spoke to her 16.9 million Twitter followers about 888 crypto projects can be found here.
What’s Wrong with Shilling NFTs?
The watchdog group undertook to warn celebrities before the FTC potentially stepped up NFTs on shillings. Simply put, what they are doing wrong is not disclosing their affiliation with certain NFT projects when promoting or approving them. This violates FTC guidelines. For example, if a celebrity has a dividend or percentage of ownership on a project and they don’t disclose it, that’s where the problem arises.
Preview of the letter
A general exemption from the original letter was published as part of the BuzzFeed article:
“We have found that celebrity NFT promotions is an area rife with deception, including, but not limited to, a failure to clearly and conspicuously disclose the promoter’s material connection to the endorsed NFT company, as well as the omission of other material information, such as the risks associated with investing in such speculative digital assets, the financial harm that can result from such investments and the personal benefit(s) the promoter may gain by virtue of the promotion(s).”
Will the FTC step in?
Currently, the answer is no. However, if they are aware of what’s going on over the NFT shilling and it continues, a lawsuit may escalate. The FTC has focused on advertising by celebrities and influencers, including the Kardashians, specifically in unethical Instagram ads. This lawsuit was so big that they changed the rules and laws of social media advertising.