SEC: Celebrity endorsements of ICOs may be illegal, investors should be cautious

Today, the U.S. Securities and Exchange Commission (SEC) warned investors to be wary of ICO projects endorsed by celebrities.

The SEC issued a broad statement on blockchain applications in late July, and today the agency added that celebrities who endorse ICOs could be violating “anti-promotion” laws if they fail to properly state the compensation they receive.

The agency said:

"Celebrities and others who use social networks to encourage the public to buy stocks and other investments may be unlawful in their endorsements if they do not disclose any compensation paid directly or indirectly by the companies they endorse."

In recent months, famous actors Jamie Foxx and William Shatner, boxing champion Floyd Mayweather, Hilton Group heiress Paris Hilton and others have publicly expressed their support for ICO projects on sale.

The SEC also warned potential investors not to base their decisions solely on celebrity endorsements.

"Investors should note that celebrity endorsements may be informal and they may be paid for something. Investment decisions should not be based solely on the endorsement of a promoter or other individual," the agency wrote.