When a celebrity or influencer buys a collection of NFTs and then posts about it on their social media, they may be influencing the value of the entire NFT collection. Even if they paid for the NFT with their own money, they are essentially pumping the value of their own investment. If a celebrity buys a cheap NFT early on and tweets about it (or when Paris Hilton appeared in the show tonight talking about their Bored Ape), this can increase the value of the NFT, so they can then make a profit when they sell later.
To further complicate matters, while sometimes celebrities pay for their own NFTs, other times collection owners give them free ones. When Jimmy Fallon changed his Twitter avatar to an image of a cartoon owl, it was after the owners of the collection gave him a Moonbird NFT as part of their plans to give free NFTs to friends or explicitly for marketing purposes. . Fallon’s promotion of the Moonbird collection increased its value, but he never revealed that it was a gift. Fallon received a letter from Truth in Advertising this week.
The letters sent today are gentle reminders. But in the past, Truth in Advertising has made this a first step in a series of escalations that eventually lead to FTC involvement. In 2016, the group sent a bunch of celebrities, including the Kardashians, this kind of friendly letter, but by 2017, the FTC was sending its own letters.