News & Insights

Home » News & Insights » Celebrities and Cryptocurrencies

Celebrities and Cryptocurrencies

Bitcoin and Blockchain, Finance and Securities

Cryptocurrencies have become increasingly popular over the past year, especially Bitcoin which has increased over 800 percent in value.[1] Today, the cryptocurrency is worth over $7,300 per bitcoin. Bitcoin’s value has jumped this week due to the Chicago Merchantile Exchange’s (CME) statement that they are planning to launch Bitcoin futures in this year’s fourth quarter.[2] Providing futures, which are contracts setting forth the time and date an asset must be purchased or sold, will “provide investors with transparency, price discovery and risk transfer capabilities.”[3] Reuters explains how this is “a major step in the digital currency’s path toward legitimacy and mainstream financial adoption”[4] if this plan receives approval from regulators. However, offering bitcoin futures to promote cryptocurrencies is not what is troubling regulators.

The Securities and Exchange Commission (SEC) published a statement on November 1, 2017 regarding the potential unlawful promotion of celebrity endorsements of cryptocurrencies.[5] The SEC explains that investments in Initial Coin Offerings (ICOs) can include securities, therefore individuals who offer and sell these securities must comply with U.S. federal securities laws or they will be violating the anti-touting and anti-fraud provisions. The SEC states that:

“Any celebrity or other individual who promotes a virtual token or coin that is a security must disclose the nature, scope, and amount of compensation received in exchange for the promotion. A failure to disclose this information is a violation of the anti-touting provisions of the federal securities laws.”[6]

As the use of cryptocurrencies becomes more popular, the SEC wants to ensure that individuals are making strategic and safe investment decisions rather than making investments based on a celebrity endorsement. Typically these celebrities do not have the “expertise to ensure that the investment is appropriate and in compliance with federal securities laws”, therefore it is essential that the details of the promotion are clearly disclosed.[7] Even the U.S. Federal Trade Commission warned ninety celebrities, “influencers”, and brands that endorsements for products on the market must disclose to the public whether there was a paid deal.[8] The SEC notes that investors should always do independent research before investing and has provided an Investor Alert guideline available here.

[1] Kelly, J. (Nov. 1, 2017) Reuters. Available at: Accessed on Nov. 3, 2017.

[2] CME Group ( Oct. 31, 2017) “CME Group Announces Launch of Bitcoin Futures.” CME Group News Release. Available at: Accessed on Nov. 3, 2017.

[3] Ib. per Terry Duffy, CME Group Chairman and Chief Executive Officer.

[4] Kelly, J. (Nov. 1, 2017) Reuters. Available at: Accessed on Nov. 3, 2017.

[5] U.S. Securities and Exchange Commission (Nov. 1, 2017) “Statement on Potentially Unlawful Promotion of Initial Coin Offerings and Other Investments by Celebrities and Others.” SEC Public Statement. Available at: Accessed on Nov. 3, 2017.

[6] Ib.

[7] Ib.

[8] Fair, L. (Sept. 7, 2017) “Three FTC Actions of Interest to Influencers.” Federal Trade Commission. Available at: Accessed on Nov. 3, 2017.

Recent Posts

Impact of Shorter COVID-19 Quarantine on Workplaces

On Monday, the CDC announced changes to its recommended isolation and quarantine time from 10 days to 5 days for asymptomatic people with COVID-19. They recommend that people leaving isolation after 5 days continue to wear a mask for the following 5 days. The CDC also...

Restaurants Sue Over Vaccine Mandate

Restaurant operators sued Mayor Bill de Blasio and New York City over Key to NYC, the new indoor vaccine mandate program, on August 17-the same day the mandate went into effect. A group of restaurants in Staten Island, through the Independent Restaurant Owners...

Financial Regulators’ New Target: Social Media Influencers and SPACs

The Financial Industry Regulatory Authority (“FINRA”) will conduct three new regulatory sweeps in an effort to combat various activities causing extreme fluctuations in the financial markets. FINRA has chosen to target special purpose acquisition companies (“SPACs”),...

Does WARN Apply to Virus Closures?

Enterprise, in Benson et al. v. Enterprise Leasing Co. of Florida LLC et al., has tried to argue that the Worker Adjustment and Retraining Notification Act (“WARN”), through its natural disaster exception, does not apply to closures caused by COVID-19. Two Florida...