In some cases, celebrity backing for a crypto project is a red flag because it’s a scam ad made by criminals.
Celebrity backing can make a big difference in the success of a crypto project, but that doesn’t mean the endorsement of a famous person makes it trustworthy.
According to a 2023 research paper by two former United States Securities and Exchange Commission economists, Joshua White and Sean Wilkoff, there is a link between a celebrity endorsement of a crypto project and the likelihood of its dubiousness.
During their research, White and Wilkoff found that in 2019, 26% of the initial coin offerings (ICO) they examined were likely scams. That number increased to nearly 40% by 2023.
