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ICO Promotion: Why You Shouldn't Trust the Stars

The cryptocurrency market and competition are growing. In order to attract more investors, blockchain startups turn to the celebrities for promotion. From this article you will learn, why you shouldn't trust even your favourite actors and legendary sportsmen.

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Cryptoassetsrank.com Published on Jul 03, 2018
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The cryptocurrency market and competition are growing. In order to attract more investors, blockchain startups turn to the celebrities for promotion. From this article you will learn, why you shouldn't trust even your favourite actors and legendary sportsmen.

They do not invest their own money

The companies do not require the celebrities to invest into their projects. The celebrities just get paid for the promotion and, if the startup fails, they will lose nothing.

For example: The antivirus creator John McAfee promotes an ICO on Twitter for $105,000, but he has not bought the project's tokens.

A screenshot from McAfee Crypto Team website

They bear no responsibility

For example: The boxer Floyd Mayweather promoted the Centra project on social media, which was devoted to developing a debit card for cryptocurrencies.

During the initial coin offering, the startup collected $30 million by selling the securities not registered at the SEC, which is a violation of the U.S. securities laws.

The project founders were arrested and the money has not been returned to the investors yet. After a legal action against the ICO, Floyd simply deleted his promotional posts from social media. There were no claims against him in terms of law.

They can promote scam ICOs

If a project is endorsed by a star, it does not mean that it is reliable.

For example: The actor Steven Seagal promoted Bitcoiin2Gen. The goal of the startup was to create a decentralized P2P payment system with its own wallet, blockchain platform and mining ecosystem.

A day before the start of sales, the SEC accused Bitcoiin2Gen of selling unregistered securities. Besides, on the project’s website there were no ICO details (no white paper or roadmap), and the only person representing the project team was Steven Seagal.

Bitcoiin2Gen was a financial pyramid because:

  • investors could get "a significant income" just for storing their tokens in the wallets;
  • the project was based on a multi-level referral system, i.e. you had to invite other people to the project in order to earn.

The project was a scam from the very beginning. Nevertheless, Steven Seagal was engaged in its promotion.

It can be illegal

Celebrities can be not informed about the laws on ICOs, that is why there is a risk that they support illegal projects.

The SEC has warned the celebrities that by promoting ICOs they can violate the law on securities, if they do not report the amount and source of payment they get for such promotion, as well as if the promoted tokens are considered to be securities.

ICO promoters who promote tokens can be prosecuted for:

  • money laundry;
  • participation in the unregistered business;
  • sale of securities;
  • illegal broker's activity.

Now, using your knowledge, you can look for some reasonable ICO projects, without being blinded by the stars.

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