The FTX fallout affected a lot of companies and retail investors. This understandably earned the ire of a lot of people who demanded their pound of flesh. Celebrities, who were paid to endorse the collapsed crypto platform, were not spared from lawsuits and public ridicule. But Celebrity Taylor Swift managed to skip all the drama by simply asking a simple question. She simply asked, “Can you tell me that these are not unregistered securities?”.
The FTX collapse dragged several celebrities into the drama when investors included the stars in a lawsuit. The case includes NFL athlete Tom Bray, Model Gisele Bündchen, Basketball Star Shaquille O’Neal, and Shark Tank Star Kevin O’Leary. They were included in the case for helping promote the crypto exchange platform.
Taylor Swift Asked a Smart Question
Adam Morowitz, a lawyer involved in the class action case against FTX ambassadors, disclosed Swift’s smart move. This shows that the star was actually concerned if she would be promoting unregistered securities, which might get her entangled in a regulatory pickle.
Almost everybody involved with crypto knows that the SEC is not shy in flexing its powers when in comes to regulating digital assets. The Securities and Exchange Commission (SEC) has tagged several crypto projects for allegedly offering unregistered securities to consumers. One of the largest cases is against Ripple Labs, the company behind XRP.
Why is the SEC After Unregistered Securities?
The SEC is responsible for regulating securities markets in the United States. It protects investors from fraudulent activities. The SEC is against unregistered securities because of the high risk due to lack of transparency and regulation. Unregistered securities are usually associated with Ponzi schemes and other investment scams, where investors are promised high returns but are left with nothing.
Companies who register their securities provide detailed information about their investment products. Registration is also a way to make sure that the securities are complying with federal laws. While this is a good way to protect consumers, the SEC is now being questioned by lawmakers for the way it is trying to regulate the crypto space. The SEC is now being accused of exercising regulatory overreach that is negatively impacting innovative and emerging markets.
Taylor Swift Taught Us a Lesson
Most people who are offered a multi-million-dollar deal won’t think twice. But Miss Swift taught something important, she did her own research. Most of us do not even know what are securities, but the superstar definitely spent time either researching or asking experts about the implications of promoting FTX. Not only did she save herself from a costly legal case, but she also saved her reputation.
The lesson of the story is to always do your own research (DYOR). Making money from the crypto space is a good goal, but blindly investing time and money in something you don’t understand is a recipe for disaster. Dare to ask questions and always remember to DYOR.
Featured Image from Unplash
