Michael Clarke, a known and important former cricket captain, is now involved in controversy after backing an Australian Initial Coin Offering (ICO). This decision of backing this ICO has gathered a lot of attention and generated controversy among investors, according to Business Insider.
This is not the first time that a celebrity endorses an Initial Coin Offering. Back in 2017, when ICOs expanded in the market, celebrities such as Floyd Mayweather or DJ Khaled were backing different projects around the world.
In the same way, Clarke supported Global Tech by tweeting about it, but the reception in the famous social media was not good enough. Indeed, John Hempton, founder and chief investment officer at Bronte Capital, linked the endorsement to Steve Smiths ball-tampering situation, that ended his captaincy in 2018.
After it, Hempton published a blog post (which has been now deleted) related to the situation about Bronte Capitals website. The post says that after promoting the ICO, his reputation was seriously damaged. Moreover, they pushed him to reconsider his decision of endorsing Global Tech.
After these comments, Clarke blocked him on Twitter and Hempton wrote back saying:
Hey, I got blocked by an ex Australian cricket captain for suggesting an ICO might be bad for his reputation.
Regulators from different countries noticed an increase number of endorsements from celebrities and other social media influencers. At the moment, it is not clear whether the Australian Securities and Investments Commission and the Australian Transaction Reports and Analysis Centre took action on what Clarke did.
In the past, one important regulatory agency, the U.S. Securities and Exchange Commission (SEC) released a warning in which they explain the risks of investing in celebrity-backed Initial Coin Offerings.
Investment decisions should not be based solely on an endorsement by a promoter or other individual. Celebrities who endorse an investment often do not have sufficient expertise to ensure that the investment is appropriate and in compliance with federal securities laws. COnduct research before making investments, including in ICOs.
In some cases, if the project is a fraud or Ponzi scheme, the celebrity backing the ICO could even face jail sentences or pay an expensive fine.
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