The US Federal Trade Commission is probing a number of crypto companies over allegations their ads have been misleading or deceptive, the company stated Monday.
“We are investigating several firms for possible misconduct concerning digital assets,” FTC spokeswoman Juliana Gruenwald Henderson stated in a press release to Bloomberg News. She declined to supply additional particulars on the confidential probes.
The shopper safety company enforces legal guidelines that require fact in promoting, together with guidelines that people disclose after they have been paid for endorsements or evaluations.
The Securities and Exchange Commission additionally has laws for the disclosures that people touting securities should make.
The company used these guidelines to crack down on movie star endorsements within the crypto house — most notably with a latest enforcement motion in opposition to Kim Kardashian. The actuality TV star didn’t admit or deny the SEC’s allegations that she illegally promoted a crypto token on her Instagram account with out correct disclosure, however she agreed to pay $1.26 million to settle the difficulty.
Investors have sued cryptocurrency alternate FTX for false promoting, amongst different claims, after the implosion of the corporate owned by Sam Bankman-Fried. The prospects, who deposited funds into yield-bearing accounts with FTX entities, allege they have been misled by movie star endorsements from the likes of Tom Brady and Stephen Curry, and weren’t conscious their accounts have been “unregistered securities.”
Cryptocurrency companies have poured cash into promoting in an effort to construct model consciousness with shoppers. Coinbase Global Inc., FTX and Crypto.com all launched high-profile ads throughout the National Football League’s championship recreation this yr, many that includes celebrities like actor Matt Damon and sports activities stars LeBron James and Shaquille O’Neal.
In March, UK regulators despatched warnings to greater than 50 corporations over deceptive crypto ads. Months earlier, the UK’s promoting authority discovered that adverts by Coinbase and Kraken, two in style crypto exchanges, have been deceptive. The Arsenal Football Club Plc was additionally dinged for deceptive followers about crypto tokens.
Source: www.bostonherald.com”