Punters investing in celebrity-promoted crypto assets, including Matt Damon, can lose millions
Punters inspired to invest in crypto assets through celebrity endorsements should be prepared to “lose the entire amount”, a market watchdog has warned, adding that there is no chance of compensation.
It comes after an array of Hollywood stars including Matt Damon, Reese Witherspoon and Gwyneth Paltrow have promoted a slew of cryptocurrencies over the past year.
But according to the Times analysis, those who followed their advice would have seen the value of their investments plummet in the months that followed.
There are now over 2.3 million UK-based crypto investors, according to official figures from last year, but the actual number is likely much higher.
Nikhil Rathi, chief executive of the Financial Conduct Authority, the city’s regulator, told The Times: “The value of many crypto assets is exceptionally volatile. If you plan to invest part of your money in these products, you must be prepared to lose the entire amount.
“We need to be very clear that there will be no compensation available for losses. It would not be reasonable for sound financial companies and their consumers to pay for the losses of these assets.
Matt Damon (pictured in July 2021 at the Cannes Film Festival) told his Twitter account in a video ad for Crypto.com that ‘fortune favors the brave’ – but those who invested would have seen a 50% loss on their investment
During the pandemic, interest in cryptocurrencies has exploded, with the market exploding in size from around $780 billion (£624 billion) in early 2021 to around $1.23 trillion (984 billion pounds sterling) in 2022.
But it was only last week that the world’s second-largest cryptocurrency, Ethereum, joined the “crypto winter” that has seen digital currencies crash, costing investors billions and fueling fears. that it is the starting point of a wider stock market crash.
Cryptocurrencies are a form of digital currency that uses math to create a unique piece of code that customers invest in.
Reese Witherspoon (pictured at the Screen Actors Guild Awards in California in February) told him on Twitter that ‘Crypto is here to stay’ – but markets fell 44%
John Terry (pictured at Villa Park in May) co-founded the collectible digital image collection Ape Kids Football Club NFTs, which lost an average of 86%
Bitcoin was the original digital currency launched in 2009 to circumvent central banks, and a growing number of derivative currencies have been founded in recent years, along with digital art called non-fungible tokens.
They have all fallen sharply in value over the past week, including a currency that has lost 98% of its value as fears for the global economy spread and investors start selling risky assets.
Gwyneth Paltrow (pictured) promoted Bitcoin on Twitter last December as part of a paid promotion for Cash App, an American money transfer app. Times analysis would suggest that those who invested in Bitcoin saw their investment lose 35%
Over $200bn (£160m) was wiped from the cryptocurrency market on May 12 alone.
The Financial Conduct Authority said it was difficult to dampen public enthusiasm for high-risk cryptocurrencies: “With celebrities as varied as Kim Kardashian and Larry David ready to take the money to promote crypto speculative, how do you curb people’s enthusiasm to do something that can seriously harm their financial life?”
Matt Damon told his Twitter following in a video ad for Crypto.com that “Fortune smiles on the brave” – but those who invested would have seen a 50% loss on their investment.
Gwyneth Paltrow promoted Bitcoin on Twitter last December as part of a paid promotion for Cash App, an American money transfer application. Times analysis would suggest that those who invested in Bitcoin would have seen their investment lose 35%.
Reese Witherspoon told him on Twitter after that “Crypto is here to stay” – but markets fell 44%.
Kim Kardashian is facing legal action from investors who sued the celebrity for advertising the allegedly scam EthereumMax cryptocurrency. It’s dropped 97% since she promoted it on her over 250 million Instagram account.
Other types of crypto assets, called non-fungible tokens (NFTs), which are digital certificates in the form of artwork, video or music, have been flogged by celebrities, including footballer Paul Pogba who promoted Cryptodragon NFTs. They have decreased by 87% on average.
Pogba said on his Twitter after a Cryptodragon’s NFT, which can be used in online games, sold for almost $160,000 (£128,000), but they are now selling for as little as $35 (£28).
John Terry co-founded the Ape Kids Football Club NFTs collectible digital image collection, which lost an average of 86%.