Crypto’s Celebrity Endorsements Attract Customers, Repel Critics

Crypto has a long — but not always proud — history of turning to celebrity endorsers to pitch everything, from shady cryptocurrencies to, more recently, top-of-the-line exchanges.

While some ads are merely strange — such as FTX ambassador and football legend Tom Brady’s Fourth of July flamethrower ad — there has long been pushback from crypto’s skeptics, who said actors, musicians and athletes shouldn’t be using their fame to push risky investments.

And while those investments aren’t nearly as questionable as they were in the first crypto boom of 2017, when some minor celebrities put their names behind fraudulent initial coin offerings (ICOs), the latest round, coming when bitcoin is down more than 70% and others far more, there’s still plenty of controversy to go around.

The Biggest Names Around

As recently as February, the crypto industry was recruiting top name celebrities like quarterback Brady and actor Matt Damon to pitch the virtues of investing in cryptocurrencies around the SuperBowl, despite a bear market that had taken almost 50% off the price of bitcoin since November.

However, celebrity endorsements do work, which could be why bitcoin sprang from being down about half its value to down about one third in the weeks leading up to the biggest sporting event in television.

FTX, which had already given Brady and his wife Gisele Bundchen equity stake — and $20 million — to become global ambassadors for the fast-growing crypto exchange, added baseball MVP Shohei Ohtani, who also got equity. Like a number of other athletes, including Block Cash App spokesman and Green Bay Packers quarterback Aaron Rodgers and star wide receiver Odell Beckham Jr., Ohtani also took part of his professional salary in crypto.

It hasn’t all been taken well, most notably when Crypto.com exchange spokesman Damon compared the creation of cryptocurrencies to aviation and spaceflight, a message that was received with loud criticism by crypto skeptics.

“This is real money that people are investing,” Giovanni Compiani, a University of Chicago marketing professor, told the New York Times in May. “Those who promote it should be more upfront about the potential downsides.”

He also noted that his research had “has found that younger, lower-income investors tend to be overly optimistic about crypto’s trajectory.”

Brady and Bundchen’s “Are You In?” commercials for FTX that saw Brady calling regular, working class “friends” ended with the tagline “FTX: The most trusted way to buy and sell _________.” The ad cycled through five potential investments: Bitcoin, ethereum, dogecoin, NFTs and crypto.

Dogecoin was the most interesting choice there: While it does have a strong enough following to see it making inroads as a payments currency as well as top 10 cryptocurrency by market capitalization, it has far less actual utility than any other major cryptocurrency, having literally been designed to be as useless as possible.

And then, of course there was Brady’s Fourth of July flamethrower ad.

I’m around if anyone needs me for their 4th of July barbecue. Fire it up @FTX_Official pic.twitter.com/Gd27fcN5fx

— Tom Brady (@TomBrady) July 4, 2022

Sketchy Beginnings

Still, arguments about whether cryptocurrencies are a good investment to pitch for millions of dollars is a far cry from crypto’s inauspicious celebrity endorsement roots, which saw D-list celebrities like actors Steven Seagal, boxer Floyd Mayweather and rapper DJ Khaled making six-figure settlements with the Securities and Exchange Commission for touting cryptocurrency initial coin offerings (ICOs) in in 2017 and 2018 without disclosing they were paid endorsers.

At the time, crypto was struggling to shake off its reputation as a currency for tax cheats and drug smugglers.

In February 2020, Seagal disgorged $157,000 after the SEC sued him for failing “to disclose he was promised $250,000 in cash and $750,000 worth of [Bitcoiin2Gen] tokens in exchange for his promotions, which included posts on his public social media accounts encouraging the public not to “miss out” on Bitcoiin2Gen’s ICO, and a press release titled ‘Zen Master Steven Seagal Has Become the Brand Ambassador of Bitcoiin2Gen.’”

A year later, the Department of Justice and SEC charged three of Bitcoiin2Gen’s founders with fraud, charging that the ICO was a scam.