The Crypto Scam You’ve Never Heard Of: Celebrity Endorsements

On August 12th, BitBoy Crypto, real name Benjamin Armstrong, filed a lawsuit against a YouTuber known as Atozy, for defamation and emotional distress. Armstrong, who sued for $75,000, named a nine-month-old YouTube video titled “This Youtuber Scams his Fans…BitBoy Crypto” as the basis for his case. On Wednesday, Armstrong dropped his lawsuit stating, “I’m sorry it became public”

The video was focused on Armstrong’s promotion of Pamp Network, $PAMP, which according to him would “only go up in price”. Shortly after Armstrong’s promotion of the coin, the token went to zero. Further investigations by ZachXTB, a crypto investigator of sorts, showed that many of BitBoy’s endorsed projects had lost significant value, potentially costing his viewers much of their savings.

But it’s not just that — many of his endorsements were undisclosed paid promotions by the token creators. This kind of undisclosed endorsing is considered fraudulent under SEC guidelines.

In an attempt to validate his actions, Armstrong has done quite the opposite, digging himself into a deeper media hole than he was in before. He’s not the only one — multiple celebrities have endorsed crypto projects that failed and are starting to renege on their previous statements of support.

A brief history on failed celebrity endorsements

Matt Damon famously endorsed investing in cryptocurrency in a series of corny ads titles ‘fortune favors the brave’ by crypto.com. If you were convinced to invest by one of these ads, you will have substantially less now than when you invested. Since the article aired, at Bitcoin’s near-record high, has now slumped into the low $20,000 bracket since, along with a decline in the larger market.

Kim Kardashian was another famous promoter of cryptocurrency. She famously hyped the token on social media. The post read:

“Are you guys into crypto???? This is not financial advice but sharing what my friends just told me about the Ethereum Max token! A few minutes ago Ethereum Max burned 400 trillion tokens — literally 50% of their admin wallet giving back to the entire E-Max community.”

Kardashian is now facing legal charges for her partnership with EthereumMax. The complaint alleges that celebrities colluded with EthereumMax in a pump and dump scheme to “misleadingly promote and sell” the token.

The list goes on and on. From Tom Brady, to Mike Tyson, Paris Hilton, Reese Witherspoon, and Mark Cuban.

A Tablespoon of Salt

We all know that any investment advice should be taken with a grain of salt. Why? Because far and few between do people actually know what they’re talking about, much less know enough to dish out sound investment advice.

When it comes to real estate, stocks, bonds, jewelry — anything and everything that can be considered an ‘investment’ consumers seem to understand this. But with crypto this kind of rational decision making seems to go out the window.

When it comes to successful predictions, a seminal book by Philip Tetlock titles “Expert Political Judgment” found that expert opinions predicting the outcome of geopolitical events struggled to perform better than “dart-throwing chimps”. Since then, research has shown that predictions backed by experts over non-experts did have a significant difference, but…

Celebrities are by no means experts in any field of investment.

Neither are crypto influencers.

We’re not asking for resumes or data on the number of successful trades that have been performed. We expect that from telegram chats we have to subscribe to, brokers, financial institutions — people that ask for our money. And we’re much more reticent to give them our money even when we have that information.

But when it comes to influencers and celebrities, the inherent legitimacy viewers grant to them appears to make them more persuasive in the way we spend. And invest.

Cryptocurrency investments across the board should be taken with a tablespoon of salt. Why? What is an expert? From a traditional standpoint maybe it is someone who has been in the industry for 10 years. Maybe 20 years?

Even the most profound crypto ‘expert’ hasn’t been in the field for longer than 13 years. Most of them can probably tout 8 years and that’s significant. Even then, the market has changed so much during that time that it’s hard to call anyone an ‘expert’ in such an emerging market.

So while eyes flock to the legal battle about to unfold between BitBoy and Atozy, bear in mind that this type of advice, even if it comes from the right place, is probably as accurate as “dart-throwing chimps” and should be treated that way. With all the right information cryptocurrency is still a risky investment. But most of all, you, the investor, should make investment decisions based on your own understanding. Not because a familiar face told you it’s a good idea. If you don’t understand it, don’t invest in it. You’ll be better off for it.

About Centuries Analytics

Investing in cryptocurrency doesn’t have to be risky — not anymore. We let data speak; not investors, “experts”, pundits, or tv show commentators. Centuries uses social media, financial, and macro-economic data to determine and predict cryptocurrency markets.

Find out more: https://www.centuriesanalytics.com/