Post Malone secretly paid $750K Ether to lace music vid with MoonPay ad
Celebrities Post Malone and The Weeknd have been caught promoting crypto fintech startup Moonpay without disclosing $750,000 in earnings.
US Federal Trade Commission (FTC) regulations require celebrities to disclose paid advertising.
The covert MoonPay ad appears at the beginning of a music video with over 12 million views on YouTube, plus untold millions on TV and music streaming platforms.
Investigative YouTuber Coffeezilla traced the payment to Post Malone and his song collaborator The Weeknd through Ethereum transfers of a Bored Ape NFT — which also makes an appearance in the ad.
Europe ousts MoonPay
MoonPay, founded three years ago in Miami, recently raised $555 million at a $3.4 billion valuation led by investment firms Tiger Global and Coatue.
The crypto fintech startup found early product-market fit by enabling users to fund offshore casino accounts and use other businesses with trouble establishing regular merchant accounts.
It operated in Europe but failed to gain regulatory approvals. In an interview, MoonPay founder Ivan Soto-Wright dodged questions about his financial conduct abroad.
“People were sketched out… Like, wait, I’m going to give this random service that I’ve never heard of access to my bank account so it can read my transaction history and then move money around,” he admitted.
Soto-Wright also “went through 13 months at the UK Financial Conduct Authority,” the most powerful securities regulator in Europe. He provided no details about their investigation.
In May 2021, Malta’s Financial Services Authority ordered MoonPay to stop onboarding customers.
Read more: [Measuring how much Elon Musk pumps crypto like Shiba Inu, Floki, Doge]
Why disclosure is necessary
The US Federal Trade Commission (FTC) prohibits anti-competitive practices like price collusion.
It bans the formation of monopolies, operates anti-spam services like the national Do Not Call Registry, and investigates false advertising.
In a plain English guide for celebs like Post Malone and The Weeknd, the FTC clearly states, “If you endorse a product through social media, your endorsement message should make it obvious when you have a material connection with the brand.”
“A material connection to the brand includes a personal, family, or employment relationship or a financial relationship – such as the brand paying you.”
Post Malone and The Weeknd’s video contains no disclosure whatsoever.
Disclosure allows people to make informed decisions. Without admitting a conflict of interest, consumers reasonably trust that an endorsement by someone is authentic.
Withholding material information creates information asymmetry, depriving consumers of the truth.
In the case of crypto assets that create a financial contract between the promoter and buyer, such as offerings that make claims about the future price appreciation of a crypto asset, the US Securities and Exchange Commission (SEC) has charged various celebrities with undisclosed conflicts of interest.
It’s also charged Floyd Mayweather, DJ Khaled, Steven Segal, Kevin Hart, T.I., and other celebrities for promoting unregistered securities.
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