The number of good investment opportunities in the cryptocurrency space is rising steadily. But at the same time, there are still some duds that should be approached cautiously–unless you want to actually lose some of your money on them. Thankfully, there are plenty of places to get information on these investments before you go and place your bets on any, so to speak.
One such source of information these days comes in the form of celebrity endorsements. Basically, a celebrity comes out and speaks positively about a certain coin or upcoming ICO, talking about the possibilities that supporting it would bring and how the reader–that is, the investor–would himself benefit from its existence.
Well, the United States Securities and Exchange Commission or SEC has now issued a statement calling out these endorsements as possibly unlawful, urging the general public to be more wary of these opportunities. You can find the SEC’s statement in full on its website.
The SEC statement is titled, “Statement on Potentially Unlawful Promotion of Initial Coin Offerings and Other Investments by Celebrities and Others.” It begins rather pointedly and quickly calls out “celebrities and others [who] are using social media” as those who may be doing unlawful deeds by hyping up ICOs and other investments. These individuals as named by the SEC include artists, sports figures, or other icons, according to the statement.
It’s not a ban on celebrity endorsements exactly, but more of a warning to the people who may be looking at getting into cryptocurrency investing to look more closely. “Investors should note that celebrity endorsements may appear unbiased,” says the SEC, “but instead may be part of a paid promotion.”
A recent example of a celebrity endorsing an investment opportunity in crypto is that of boxer Floyd “Money” Mayweather posting a bunch of tweets on his own Twitter account in full support of a new ICO from a start-up called Hubii. While some people may have been intrigued by seeing Mayweather’s support, causing them to look into the actual details of the ICO and find out how to become part of it, there are others who have called out the famous boxer for simply cashing in on something new and popular. And there are, of course, more celebrities just like him.
The SEC’s statement wraps up by giving actual tips on how to make sure that a cryptocurrency investment is actually worth checking out. First, you should conduct research because investment decisions shouldn’t be based solely on the word of a promoter or individual. And always try to find out the nature of the relationship of the endorser and the company behind the crypto investment being endorsed. There are a lot more factors that need to be considered, but even these two alone will give you the important information you need before making a decision.
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