2nd December 2023 – (Hong Kong) The high-profile class action lawsuit against footballer Cristiano Ronaldo for promoting Binance underscores the immense influence of celebrity cryptocurrency endorsements and the need for accountability when things go wrong. Ronaldo’s endorsement allegedly influenced investors to buy into Binance-affiliated crypto assets that ended up losing significant value, resulting in over US$1 billion in damages sought by plaintiffs. This case reinforces that celebrities have an obligation to thoroughly vet any crypto projects they promote, not just chase lucrative sponsorship deals. Like the JPEX scandal in Hong Kong, it’s another cautionary tale about the power of celebrity endorsements and the potential for harm when they act negligently or unethically.
Meanwhile, in Hong Kong the law enforcement agencies have received reports from 2,623 victims in the ongoing JPEX unlicensed crypto exchange platform case, involving an estimated amount of HK$1.6 billion. So far, a total of 66 individuals have been arrested in connection with the case. All those arrested have been granted bail and are required to report back between late December and January next year.
With over 2000 investors affected and losses totalling a staggering HK$1.6 billion, irresponsible celebrity promoters who enabled this scam through endorsements must face accountability. Stricter regulations on crypto endorsements are needed to prevent such harms.
Various celebrities enthusiastically shilled JPEX across social media, portraying it as a reliable platform for effortless profits. Their celebrity status bestowed undeserved credibility, misleading multitudes into risky investments. This saga demonstrates that celebrity promotions of unlicensed crypto ventures require oversight to protect unwary citizens.
Actor Julian Cheung featured in JPEX ads even after it was named on the SFC alert list, implying it was trustworthy. Social media influencer Joseph Lam aggressively touted JPEX as a path to riches, encouraging citizens to “invest big to earn big”. Actress Jacqueline Ch’ng allegedly promoted the platform extensively despite its lack of licence.
These celebrities lent their credibility to dupe citizens into investing in JPEX, convincing them it was safe and profitable. In reality, they failed to conduct proper due diligence, instead chasing commissions through what appears to be negligent or even unethical behavior. Their outsized influence enabled the scam’s massive scale.
Strict regulations on celebrity crypto endorsements are needed to prevent such harms. Requiring transparent disclosures of promotions, mandating due diligence, and banning the highest-risk asset endorsements would force accountability. Cool-off periods between celebrity investments and subsequent promotions could help curb irresponsible pumping. Enforcing transparency around influencers’ token holdings would reveal biases too.
Legislators can draw lessons from jurisdictions like the U.S. and U.K. that have grappled with misconduct around celebrity crypto endorsements. Such cases reveal the power but also dangers of opaque and misleading promotions exploiting consumers’ lack of understanding. Hong Kong must lead in addressing this vulnerability.
While class action lawsuits do not exist in Hong Kong, victims of the JPEX scam could potentially band together to file representative proceedings against negligent celebrity endorsers under the apparent common grievance of being misled by their promotions. This involves one or more representative plaintiffs suing on behalf of a wider group sharing the same interest, without needing to specifically name each affected individual. The case law indicates that to satisfy the “same interest” requirement, all represented must share a common injury and desired form of relief, such as damages. If declaratory relief establishing liability is secured, each victim may then file individual actions to claim damages tailored to their specific losses. Though speculative, this avenue could see celebrities forced to account for irresponsible promotions that enabled the scam. Even the threat of reputational damage or financial penalties may prompt greater prudence among celebrities endorsing crypto in future.
In essence, the scam’s perpetrators deserve condemnation above all but celebrities who enable such frauds through laxity and greed also warrant blame. JPEX should serve as their wake-up call. The public expects celebrities to vet endorsed ventures thoroughly and abstain from inflated hype. With great fame comes great responsibility.