Celebrity-endorsed cryptocurrencies nearly five times more likely to be scams, study finds

If a famous person tells you to buy a token, you should probably run. That’s not cynicism. It’s what the data says. A study by former SEC economists Joshua T. White and Sean Wilkoff quantifies what many crypto veterans already suspected: celebrity endorsements on token projects don’t just fail to signal quality. They actively predict fraud. By April 2023, celebrity-endorsed ICOs were associated with a 39-40 percentage point increase in scam likelihood compared to projects without famous backers. The numbers got worse over time The study tracks the relationship between celebrity involvement and fraud across multiple market cycles, and the trend line is grim. Through September 2019, celebrity-endorsed ICOs showed a 23-26 percentage point increase in scam rates. But by April 2023, that gap had widened to 39-40 percentage points. The mechanism is straightforward. Celebrity endorsements substitute for the traditional fundraising signals that serious projects use, things like technical whitepapers, team credentials, and audit trails. Instead, star power drives larger capital raises and better exchange listings in the short term. Projects get more money, faster, from a broader pool of ret...