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It’s been a bad month week for crypto.
The Federal Trade Commission is reportedly “probing several crypto firms over allegations their advertisements were deceptive or misleading,” according to Bloomberg.
“While we can’t comment on current events in the crypto markets or the details of any ongoing investigations, we are investigating several firms for possible misconduct concerning digital assets,” wrote FTC spokesperson Juliana Gruenwald Henderson to Marketing Brew. She did not say whether the investigation is centered on the firms’ advertising strategies.
Backtrack: If you’ll remember, 2022 kicked off with the “Crypto Bowl” as cryptocurrency firms like FTX, Crypto.com, and Coinbase flooded the airways with ads. Crypto-related brands spent $223 million on ads in the US through October of this year, according to CNBC, up 150% from 2021.
Then, crypto tanked. FTX crashed, and the Miami Heat decided to rename its arena.
Called out: Stars have recently found themselves in hot water for shilling crypto. Celebrities including Larry David and Tom Brady, who have starred in FTX commercials, were named in a class-action lawsuit against FTX and its former CEO Sam Bankman-Fried last month that alleges their endorsements gave “credibility” to the company.
Another class-action lawsuit accused Floyd Mayweather Jr. and Kim Kardashian of making “false or misleading” statements about EthereumMax, though it was dismissed by a federal judge this week.
Meanwhile, the SEC hit Kim Kardashian with a $1.26 million fine for failing to disclose that she was paid to promote EthereumMax on Instagram earlier this year.
Related, unrelated: In other misleading advertising news, the FTC and several states just settled with Google and iHeartMedia for allegations of paying radio personalities to promote the Pixel 4 with testimonials…without actually giving them the phone.—RB