Celebrities Are Facing Legal Ramifications From NFT Endorsements

Steve Huff
Steve Huff is an Editor and Reporter at dot.LA. Steve was previously managing editor for The Metaverse Post and before that deputy digital editor for Maxim magazine. He has written for Inside Hook, Observer and New York Mag. Steve is the author of two official tie-ins books for AMC’s hit “Breaking Bad” prequel, “Better Call Saul.” He’s also a classically-trained tenor and has performed with opera companies and orchestras all over the Eastern U.S. He lives in the greater Boston metro area with his wife, educator Dr. Dana Huff.
Celebrities Are Facing Legal Ramifications From NFT Endorsements
Image from Shutterstock

Celebs, like everyone else, just want to be in on what’s cool and new. In the last five to six years, that’s been cryptocurrency and NFTs. It’s a new frontier in celebrity shilling for products, but it’s not as straightforward as just holding up a favorite can of beer and saying it tastes great. The blockchain holds risks for everyone, and when you’re famous, the costs of taking those risks could get out of hand very quickly.


The List of 17

Seventeen famous names found that out in early August 2022. That’s when consumer watchdog group Truth in Advertising (TINA) sent letters to a diverse group that included A-listers like DJ Khaled, Eminem, Gwyneth Paltrow, and Tom Brady. Each letter was tailored to its recipient but included the following statement:

While TINA.org is not currently addressing a specific deceptive marketing issue pertaining to such posts, we have found that celebrity NFT promotions is an area rife with deception, including, but not limited to, a failure to clearly and conspicuously disclose the promoter’s material connection to the endorsed NFT company, as well as the omission of other material information, such as the risks associated with investing in such speculative digital assets, the financial harm that can result from such investments, and the personal benefit(s) the promoter may gain by virtue of the promotion(s).

The letter advised celebs that they were required to disclose a financial connection to whatever NFT collection they promoted and then singled out Justin Bieber and Reese Witherspoon. TINA was onto the connection between the former’s inBetweeners NFTs and the latter’s connection with World of Women NFTs.

The letter sent to Reese Witherspoon was blunt. It linked tweets the actor had posted about World of Women NFTs in 2021 and 2022 and stated that the Federal Trade Commission (FTC) "requires that social media influencers such as Ms. Witherspoon clearly and conspicuously disclose when they have any financial, personal, or other material relationship with a brand.”

Witherspoon, the letter read, “markets an NFT company (in which she has a personal stake) without ever disclosing the risks associated with investing in such speculative digital products, and the financial harm that can result from such investments.” That lack of transparency, TINA’s letter concluded, “is particularly important in light of Ms. Witherspoon’s widespread popularity among fans of varying degrees of financial experience.”

As an August 8 BuzzFeed report about the notifications pointed out, even celebrities who buy a Bored Ape out of pocket are “essentially pumping the value of their own investment” when they do anything to promote the collection, like posting an image on Instagram.

TINA’s warning letters were an important heads up for stars who don’t want to run afoul of the Federal Trade Commission. TINA’s warnings have often preceded the FTC filing legal action, known as a “Notice of Penalty Offenses Concerning Deceptive or Unfair Conduct around Endorsements and Testimonials.” Most celebrities would rather not get hit with the kinds of substantial fines the government can levy for unfair or deceptive practices.

Seth Green’s BAYC Saga

A few months before the bulk of TINA’s letters went out, actor, writer, and ‘Robot Chicken” co-creator Seth Green discovered another danger of that blockchain life: There are legal gray zones galore.

Green had purchased a few Bored Apes (BAYC), including #8398, which he dubbed Fred Simian. Not long after he went on his shopping spree, Green fell for an old-fashioned phishing scam—he responded to a message that ultimately prompted him to enter his OpenSea login information, and in short order, some of his most valuable NFTs were transferred to the wallet of one “Mr Cheese.”

The actor was desperate to get his property back, tracking down Mr Cheese’s likely Twitter account and posting public messages asking for Fred’s return. It turned out that Green wasn’t just running a Twitter account for Fred Simian—by acquiring the copyright to Fred with his purchase, Green was building an entire mixed animation and reality sitcom, “White Horse Tavern,” around the character.

White Horse Tavern @Veecon with Seth Green and Garyvee

In the end, blockchain records indicate an account associated with Green’s known buying history was used to repurchase Fred Simian, this time for nearly $300,000.

Had Green taken the case to court, it wouldn’t have been easy for him. The blockchain was designed for anonymous transactions, and it can be hard enough for law enforcement to investigate crimes online in the first place—add in cryptocurrency security and the result can be a bit of a nightmare even for seasoned online sleuths.

Seth Green’s Bored Ape ordeal was perhaps a bit more straightforward than concerns over celebrity disclosures putting the likes of Gywneth Paltrow and Jimmy Fallon in the FTC’s crosshairs. Non-famous people buy NFTs and trade crypto daily, frequently confronting phishing attacks. What happened to him happens to a lot of consumers—the FTC reported in June this year that scammers had taken in a billion dollars since January alone.

Talking About Your Reputation

TINA’s warning letters and Seth Green’s adventures in BAYC-land are just two aspects of cryptocurrency complexity. Famous folks face other challenges when they get into crypto in some form—challenges that have more to do with PR than the law. During Super Bowl LVI in February 2022, Matt Damon and Larry David appeared in high-profile, expensive commercials for the crypto.com and FTX exchanges.

Both spots received plenty of notice on social media at the time, but in June 2022 crypto winter began. Damon’s and David’s became fodder for bitter jokes from those losing money in the tanking market and sources of schadenfreude for crypto skeptics.

The ads seemed to vanish from regular rotation pretty quickly, so it’s likely the reputational damage to either star was minimal in the long run—and after all, Matt Damon and Larry David were obviously paid spokespeople.

In a recent article for Law 360, attorneys Amy Mudge and Lauren Bass of national law firm Baker & Hostetler LLP discussed Truth in Advertising’s letters to celebrities about their lack of disclosures. Mudge and Bass acknowledged that while TINA’s letters reflected frustration with “the lack of aggressive enforcement of individual influencers,” the FTC is likely taking the right approach to these issues on its own. The government agency has published guidelines for influencers in plain, non-legalistic language and has generally taken an educational approach rather than aggressively issuing warnings.

Mudge and Bass write that the FTC’s “focus on education rather than reprimand is arguably a smarter use of the agency's limited resources. This approach has helped to increase awareness of responsibilities as well as overall compliance by brand marketers, influencers and even social media platforms.”

Still, the attorneys have some free advice for celebs still interested in an NFT collab.

“Regardless of the product or medium in which such endorsement takes place,” Mudge and Bass write, “remember to follow federal guidelines regarding endorsements and to clearly and conspicuously disclose the relationship of the parties along with the potential volatility of any digital asset investment.”

In response to dot.LA's request for additional comment, Amy Mudge says, "There has always been a focus on celebrities promoting products for companies they have a financial relationship with. The FTC and the states have focused on the importance of making clear when you are paid by a brand to promote."

Mudge, who also co-leads Baker & Hostetler's advertising, marketing, and digital media team, goes on to admit that "it is sometimes hard to see the harm from" celebrities saying they use a particular product without disclosing a profit-making relationship with a brand. "But if celebrities are paid to promote crypto investments or buying NFTs," Mudge says, "the financial outlay can be large and the short and long-term value uncertain. So, we can expect to see more enforcement activity and also litigation in such cases."

So—be clear when you get paid to tell others to invest in new, unfamiliar assets. The world of crypto is shady enough as it is.

steve@dot.la
VC Giants Back LA Defense Tech Startup

🔦 Spotlight

Hello Los Angeles, and happy Friday!

Memorial Day Weekend is finally here, and it seems even PCH got the memo, just in time for those coastal drives to kick off summer, traffic jams included. Speaking of navigation, El Segundo based startup CX2 has charted its own impressive course this week, securing $31 million in a Series A round led by Point72 Ventures, with participation from Andreessen Horowitz, 8VC, and Pax Ventures, to boost its mission in electronic warfare.

Electronic warfare (EW), for those of us who aren't regulars at the Pentagon, involves the tactical use of electromagnetic energy to control the spectrum, essentially jamming or confusing enemy communications and radar systems. CX2 was founded by a diverse and experienced group: Nathan Mintz, who brings deep expertise in defense technology from previous ventures such as Epirus and Spartan; Mark Trefgarne, a software entrepreneur known for a successful acquisition by Meta; Lee Thompson, an expert RF engineer previously with SpaceX; and Porter Smith, whose practical insights stem from his background as a U.S. Army helicopter pilot and subsequent experience as an investor.

The new funds will help CX2 scale its team and accelerate the development of advanced tools, including autonomous drones and specialized signals-intelligence systems. These innovations promise precision interference without collateral disruptions, addressing critical defense capability gaps identified by industry experts.

With tensions escalating globally, there's big demand for next-gen defense solutions, and CX2’s technology positions them as a major player in shaping future electronic battlespaces.

Dive deeper into the details and check out this week's roundup of LA’s venture deals and acquisitions below.

Here's to a weekend filled with sunshine, clear roads (fingers crossed), and tech that keeps pushing boundaries!

🤝 Venture Deals

LA Companies

  • Axle Health, founded by former Uber execs, raised $10M in Gaa Series A round led by F-Prime Capital to expand its AI-powered logistics platform for home healthcare. The software streamlines scheduling, routing, and patient engagement, and is now used by major health systems and agencies across all 50 states. The company has seen 10x revenue growth over the past year. - learn more
  • Promise, a generative AI studio based in Venice, California, has secured a strategic investment from Google's AI Futures Fund, alongside contributions from The North Road Company, and others. This funding will support Promise's integration of advanced AI technologies into its proprietary production platform, MUSE, and facilitate collaborations with Google's DeepMind researchers to push the boundaries of AI-driven storytelling. The studio plans to commence production on its first feature-length film this year, marking a significant step in its mission to blend human creativity with cutting-edge AI tools in filmmaking. - learn more
  • Final Boss Sour, a Los Angeles-based snack brand blending gaming nostalgia with sour fruit treats, raised $4M in a Seed 2 round. The funds will go toward expanding distribution, product innovation, and creator partnerships. The company also launched a new tropical sampler box featuring real fruit flavors like mango, pineapple, and kiwi. - learn more
  • VUZ, a UAE-based immersive media platform, raised $12M in a pre-Series C round led by the International Finance Corporation with participation from CrossWork.us, among others, to fuel global expansion and enhance its AI-powered streaming experiences. The funding brings its total raised to over $35M and will support growth across the U.S., Africa, Asia, and the Middle East. VUZ, now EBITDA positive, hosts 30,000+ hours of immersive content and has exclusive deals with leagues like LaLiga and Serie A. - learn more

      LA Venture Funds

      • B Capital co-led Data Sutram's $9M Series A funding round, supporting the company's expansion of its AI-driven fraud detection platform into sectors like cryptocurrency, gaming, and insurance. The investment will also aid in strengthening Data Sutram's AI capabilities and facilitating its international growth into markets such as the Middle East and Southeast Asia. - learn more
      • Upfront Ventures led Clair's $23.2M Series B funding round, reinforcing its commitment to the fintech startup it initially backed during the seed stage. Clair provides embedded earned wage access (EWA) solutions, allowing employees to access their earnings instantly through integrations with payroll and workforce management platforms like Gusto and TriNet. The new funding will support Clair's expansion across more than 29,000 business locations and enhance its partnerships with additional HR and payroll providers. - learn more
      • Rebel Fund participated in Keep's recent C$108M funding round, supporting the Toronto-based fintech's mission to modernize small business banking in Canada. Keep offers an all-in-one financial platform tailored to Canadian small businesses, addressing challenges like outdated systems and limited access to credit. The funding will help Keep expand its services, which include business credit cards, expense tracking, and multi-currency accounts, to more entrepreneurs across the country. - learn more
      • MarcyPen Capital Partners participated in SparkCharge's $30.5M funding round, supporting the expansion of its mobile, off-grid EV charging services across North America. This investment will help SparkCharge scale its Charging-as-a-Service model, enabling fleets to adopt electric vehicles without the need for permanent infrastructure. - learn more
      • Matter Venture Partners participated in Biostate AI's $12M Series A funding round, supporting the Houston-based startup's mission to revolutionize molecular diagnostics through affordable RNA sequencing and generative AI. Biostate AI aims to build a comprehensive RNA sequencing dataset to train AI models capable of predicting disease progression and treatment responses, thereby advancing precision medicine. - learn more
      • Prototype Capital participated in Sensmore's €6.5M funding round, supporting the German robotics startup's mission to retrofit heavy machinery with AI-driven automation. Sensmore's technology enables real-time automation of complex tasks in industries like construction and mining. The investment will help expand Sensmore's Physical AI platform, enhancing productivity and safety in industrial operations. - learn more

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            Forget Traffic: Air Taxis Are Coming to LA28

            🔦 Spotlight

            Hello Los Angeles,

            The future just got a flight plan, and it includes skipping traffic for the 2028 Olympics.

            Image Source: Archer

            This week, Santa Clara-based Archer Aviation made headlines (and history) by being named the official air taxi provider for the LA28 Olympic and Paralympic Games and Team USA. Yes, that means electric vertical takeoff and landing (eVTOL) aircraft will be soaring above the gridlocked freeways, whisking athletes, officials, and perhaps a few lucky spectators through LA’s famously congested skies.

            This isn’t just a flashy PR stunt (although, let’s be honest, it is peak LA). It’s a strategic move to redefine how we move around the city, especially during one of the largest global events ever to hit Southern California. In partnership with the LA28 Organizing Committee, Archer plans to deploy its Midnight aircraft, an all-electric air taxi that promises ultra-quiet, zero-emission rides from point A to point OMG-I’m-not-in-traffic.

            While Archer is headquartered in Santa Clara, it has deep ties to the LA tech ecosystem. United Airlines, one of its major partners, has previously announced plans to establish eVTOL routes between downtown and LAX. Pair that with this new Olympic milestone and we’re looking at LA as ground zero for what could become the world’s first large-scale urban air mobility network.

            Of course, there are still regulatory hurdles, infrastructure needs, and airspace coordination issues to iron out before we can book our sky ride to the Coliseum. But make no mistake, this announcement is a moonshot moment for LA tech, mobility, and the future of Olympic-scale transportation.

            We’ll be keeping our feet on the ground (for now), but we’ll definitely be watching the skies.

            Catch you next week ✈️✨

            🤝 Venture Deals

            LA Companies

            • Akido, a Los Angeles-based health tech company, has raised $60M in Series B funding led by Oak HC/FT to expand the reach of its AI-powered clinical tool, ScopeAI. The platform assists physicians by generating clinical questions, documenting patient responses, and drafting care plans in real time. The funding will help Akido scale its technology across its provider network and expand into new markets like New York City. - learn more
            • Reflect Orbital, a startup developing satellite-based sunlight delivery systems, has raised $20M in a Series A round led by Lux Capital. The company plans to use the funding to expand its team, scale operations, and prepare for its first satellite launch in Spring 2026. Reflect Orbital’s technology aims to reflect sunlight from space to Earth, enabling nighttime illumination for energy, remote operations, and civil infrastructure. - learn more
            • Rolli, an AI-powered platform designed to support fact-based journalism, has received an investment from the NYU Impact Investment Fund (NIIF). This marks NIIF's first investment in a media company, underscoring its commitment to backing ventures that enhance democratic institutions through innovation. Rolli's platform connects journalists with a diverse range of vetted experts, aiming to streamline news production and promote equitable representation in media. The funding will help Rolli expand its reach and further develop tools that empower journalists to produce accurate and impactful reporting. - learn more

              LA Venture Funds

              • CIV and Wonder Ventures participated in The Nuclear Company’s $46.3M Series A round to support its plan to develop large-scale nuclear reactor sites across the U.S. CIV co-founder Patrick Maloney also co-founded the company, which is taking a “design-once, build-many” approach to modernize nuclear construction. The funding will help meet rising energy demands from sectors like AI and data centers. - learn more
              • WndrCo participated in Cartwheel's recent $10M funding round. Cartwheel is an AI-driven 3D animation startup that enables creators to generate rigged animations from text prompts and videos. The funding will support Cartwheel's efforts to simplify and democratize 3D animation production. - learn more
              • Crosscut Ventures participated in Solestial's $17M Series A funding round, which aims to scale the company's production of radiation-hardened, self-healing silicon solar panels for space applications. Solestial plans to increase its manufacturing capacity to 1 megawatt per year, matching the combined annual output of all U.S. and EU III-V space solar companies. This investment supports the growing demand for cost-effective, high-performance power systems in the expanding space industry. - learn more
              • Upfront Ventures participated in Tern's $13M Series A funding round, adding to its earlier $4M seed investment in the travel tech startup. Tern offers an all-in-one platform for travel advisors, streamlining itinerary building, CRM, and commission tracking. The new funding will help Tern enhance its product offerings and expand support for its growing user base. - learn more
              • Dangerous Ventures participated in Verdi's $6.5M seed funding round, supporting the Vancouver-based agtech startup's mission to modernize farm irrigation systems through AI-powered automation. Verdi's technology retrofits existing infrastructure, enabling precise, row-level control of irrigation, which helps farmers reduce water usage and labor costs. The investment aligns with Dangerous Ventures' focus on climate resilience and sustainable food systems. - learn more
              • Pinegrove Capital Partners participated in Saildrone's recent $60M funding round, supporting the company's expansion of its autonomous maritime surveillance technology into Europe. The investment will aid in deploying Saildrone's uncrewed surface vehicles for enhanced maritime security and defense applications across European waters. - learn more
              • Starburst Ventures participated in a €2 million seed funding round for French defense tech startup Alta Ares, which specializes in embedded AI and MLOps solutions for military applications. Alta Ares' technologies, including the Gamma platform for real-time video analysis and the Ulixes platform for managing operational data lifecycles, operate autonomously without the need for internet or cloud connectivity. This funding will support the industrialization of these solutions and expand their deployment across European armed forces and NATO allies. - learn more
              • Nomad Ventures participated in Stackpack’s recent $6.3M seed funding round, supporting the company's mission to streamline vendor management for modern businesses. Stackpack offers an AI-driven platform that provides finance and IT teams with a centralized system to oversee third-party vendors, manage renewals, and mitigate compliance risks. The investment will enable Stackpack to expand its operations, enhance its platform, and introduce new features like the "Requests & Approvals" tool, aimed at simplifying vendor onboarding and procurement processes. - learn more
              • Tachyon Ventures participated in Stylus Medicine's $85M Series A funding round, supporting the biotech company's development of in vivo genetic medicines. Stylus aims to simplify gene editing by enabling precise, durable CAR-T therapies delivered directly inside the body, potentially transforming treatment for various diseases. - learn more
              • Up.Partners led a $28M Series A funding round for WakeCap, a construction tech startup that uses sensor-powered platforms to deliver real-time workforce visibility and site intelligence. WakeCap’s system tracks labor hours, safety, and productivity across large-scale projects, with over 150 million labor hours already monitored. The new funding will help the company expand globally, enhance product features, and grow its engineering and customer success teams. - learn more


                LA Exits

                • MediaPlatform, a leading provider of enterprise video solutions, has been acquired by Brandlive, a company renowned for bringing the magic of television to business communications. This strategic acquisition aims to enhance Brandlive's capabilities in delivering high-scale, reliable CEO town halls and global corporate broadcasts. By integrating MediaPlatform's robust infrastructure with Brandlive's creative video tools and production services, the combined entity seeks to offer more engaging and authentic internal content experiences for enterprise clients. - learn more
                • RHQ Creative, a studio renowned for its competitive Fortnite training maps, has been acquired by JOGO, the game development company founded by popular creator Typical Gamer (Andre Rebelo). This acquisition aims to bolster JOGO's expansion into the competitive gaming arena by integrating RHQ's expertise in skill-building and training map design. RHQ Creative, co-founded by Fortnite pro Quinn Gannon (RichHomieQuinn) and Sean Lugo, has achieved over 20 million map visits and 200 million hours of playtime. The deal includes full ownership of RHQ's map catalog and the addition of its team to JOGO, enhancing the company's capabilities in developing high-quality, competitive gaming experiences. - learn more

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                    This LA Startup Wants to Make It Rain and Just Raised $25M to Do It

                    🔦 Spotlight

                    Hello LA!

                    While most tech headlines are busy chasing AI chatbots and flying taxis, one startup in El Segundo is aiming a little higher. Literally.

                    Rainmaker just secured$25 million in Series A funding to expand its cloud-seeding drone technology. The round was led by Lowercarbon Capital, with participation from Starship Ventures, 1517 Fund, Long Journey Ventures, Naval Ravikant, and others.

                    Their idea is simple but urgent. Instead of relying on old-school aircraft to spray rain-making particles across the sky, Rainmaker uses AI-powered drones that find and seed clouds with pinpoint accuracy. It is faster, more affordable, and could reshape how regions fight back against droughts.

                    California's ongoing water struggles have made it clear that simply "saving" water is not enough. Cities and entire economies need new tools to create it. Rainmaker plans to use the funding to grow its fleet, invest in atmospheric science, and expand commercial partnerships with utilities and governments searching for solutions.

                    Bigger picture, Rainmaker is part of a growing shift in LA's tech ecosystem. While software remains dominant, more investors and founders are quietly betting on "hard tech" that addresses real-world problems like water, energy, and infrastructure.

                    It is not just about apps anymore. It is about survival tech.

                    With the skies getting hotter and the reservoirs getting lower, the next great tech export out of LA might not be entertainment or social media. It could be rain.

                    Stay tuned…

                    🤝 Venture Deals

                    LA Companies

                      • SimpleClosure, a Santa Monica-based startup that automates the business shutdown process, has raised a $15M Series A funding round led by TTV Capital. The company, which launched publicly in late 2023, helps startups and businesses navigate legal, regulatory, and compliance hurdles when closing down, using AI to streamline paperwork and communications. The new funding will support SimpleClosure’s platform growth and product expansion, as rising economic pressures create heightened demand for efficient dissolution solutions. - learn more

                        LA Venture Funds

                        • Alexandria Venture Investments participated in Haya Therapeutics’ $65M Series A funding round. Haya Therapeutics, which is developing precision RNA-guided medicines for chronic and age-related diseases, will use the capital to advance its lead therapeutic programs targeting heart failure and fibrosis. The company plans to expand its pipeline, invest in its discovery platform, and grow its team to accelerate clinical development. - learn more
                        • Griffin Gaming Partners led a $7M funding round for Fuse Games, a gaming studio focused on developing new original IP. Fuse Games, founded by industry veterans with experience at major gaming companies, plans to use the funds to accelerate production of its first title and expand its team as it builds ambitious new gaming experiences. - learn more
                        • Shamrock Capital has made a strategic growth investment in Neocol, a leading consulting platform that specializes in sales and AI-driven software solutions for subscription businesses. Neocol, which helps companies optimize revenue operations and digital transformations, plans to use the investment to accelerate its growth, expand its services, and further strengthen its leadership position in the Salesforce ecosystem. - learn more
                        • Trust Fund participated in a $7.2M seed funding round for Agree.com, an all-in-one platform that combines e-signature and integrated payments, aiming to streamline and speed up service agreements. The company plans to use the new capital to grow its engineering team, expand integrations, and enhance payment capabilities to help service providers close deals faster. - learn more
                        • Hyperlink Ventures participated in Orca AI’s $72.5M funding round. Orca AI, headquartered in London, develops AI-based navigation and collision-avoidance solutions to improve safety and efficiency for commercial shipping fleets. The funding will help Orca AI scale its autonomous shipping technologies, expand its team, and support global growth efforts. - learn more


                        LA Exits

                        • StoryFire, a social storytelling and video platform with over 2.5M users, has been acquired by Flashy Finance to launch a new platform called Flashy Social. The move aims to merge content creation with blockchain-powered financial tools, allowing creators to monetize through token incentives, streaming features, and community engagement. This acquisition supports Flashy Finance’s broader vision of building a cultural, creator-led financial ecosystem. - learn more
                        • Jaanuu, Inc., a Los Angeles-based medical apparel brand known for its stylish and functional scrubs, has been acquired in an asset sale by VentureOn Management, LLC. The acquisition includes substantially all of Jaanuu's assets, encompassing its intellectual property, inventory, and customer relationships. VentureOn Management plans to continue Jaanuu's operations, focusing on delivering high-quality medical apparel to healthcare professionals. - learn more
                        • Skechers has agreed to be acquired by 3G Capital in a deal valued at approximately $9.4 billion. Shareholders will receive either $63 per share in cash or $57 plus an equity unit in a new private parent company. Following the acquisition, Skechers will become privately held, maintain its Manhattan Beach headquarters, and continue to be led by its current management team. - learn more

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