One of the most difficult pills to swallow in cryptocurrency is the fact that so many of these new currencies that come out are outright scams. And sometimes we could spot them. And in this video, we're going to talk about some new research that is out there that definitely helps us in spotting scams. Now, full disclosure, I've been scammed. I'm sure you've been scammed. When you're messing around in the DeFi space or the meme coin space or both things happen. It's one of the issues we have to solve in cryptocurrency, cleaning up the space. It's a weird kind of situation, though, because we want legal oversight in order to clean up the space or we should want that. But at the same time, we don't want legal oversight that's too far reaching that takes away from decentralization. It's kind of a double-edged sword. And in a lot of ways, I think we, as investors, have to be smart. We can do that by diversifying our portfolio, not overleveraging ourselves in a new token, not going all in on some random shit coin. Now in this video, we're going to talk about what's going on here, because this research is very interesting. It says celebrity-backed token offerings, more likely to be a scam. Research reports. So really, what we're looking at here is if we see huge celebrities, not influencers, we're nothing compared to the Floyd Mayweathers of the world, right? We're talking about the Kim Kardashian, the Jake Pauls, the Floyd Mayweathers. And I think we're going to already see a lot of these celebrities kind of dial back what they do with crypto, although there are still a ton of these out here. And when they're celebrity-backed and when they're ICOs, when they're not yet launched. So let's dive into some of this research here, because new research shows there's a link between celebrity endorsement of a crypto project and the likelihood of it being a scam. So they found that celebrity-endorced ICOs are associated with 23 to 26 percent point increases in scams from September 2019 and a 39 to 40 percentage point increase in fraudulent ICOs through April 2023. So that is a big, big number. The suggestive evidence points to red flag for investors, the research wrote. Now full disclosure, I worked in academia for years. These research articles, I'm assuming this is a one-off research article, they're not the end all be all. And I'm going to tell you this, whoever wrote these articles probably aren't crypto-digens. But there is some merit to this, right? Because we could just see this on the surface being in crypto every single day. All I'm saying is they're probably missing some things in this article. Don't take these as like, you know, gospel. The research examined the behavior of 21 celebrities though from 2016 to 2018, including Floyd, Snoop Dogg, Parasilton, and Lionel Messi. It's a pretty good amount though. And we assume that celebrities could boost the visibility of crypto of the crypto given their social media reach. No doubt. Given the novelty of the blockchain and crypto, we were unsure if celebrities would have expertise to identify credible projects. Another key finding was that celebrity endorsements are more likely to be a scam when the celebrities profession does not match the ICO product. That's interesting. However, when the celebrities profession matches the ICO products, such as a soccer player endorsing an ICO that will fund a blockchain-based sports gambling website, it's less likely to be a scam. Yeah, see, like, I agree with this. And like, if Lionel Messi went out and talked about chilies, which is a really good top 100 crypto, they're in the area of sports, right? Sports fan tokens. That would make sense. But if Lionel Messi is talking about kitty cat coin, like, might be a red flag, right? This shows that when celebrities understand the use case of the token, they seem to be more diligent or have a better understanding of the product they are endorsing. In the research conclusion, they highlight the need for both investors and celebrities to be better to better understand the risks they come with crypto and to conduct due diligence before endorsing a digital asset. So here's the other thing though. It's kind of crazy because no matter who you are in this situation, no matter if you are just an investor, an influencer like myself on a small scale or a Floyd Mayweather, none of us in any of those situations hold the keys to the kingdom. So the onus is really on us as investors. There have been times where you can do as much research as you can do, but then they rugged anyway, right? They pull the keys anyway and we find out they're a bad actor. So like, it's very, very difficult to kind of point the finger at one person here or point the finger at Floyd Mayweather. Floyd Mayweather got approached or any for any of these people, they got approached, they want to get paid, they have a presence and that's, you know, the end of it, right? And you just hope that the people running the project are not, you know, nefarious, right? Now focusing solely on ICOs or initial coin offerings, the research also found that celebrity endorsements increased the amount of money raised. Yeah, see, this is where it gets really scary where you're just putting money into the middle of pot, right? We were not surprised at celebrities boosted the visibility of the coin or crypto project, but we're surprised at the magnitude of their effect. Only enough celebrity endorse tokens were also 37% less likely to have a presale. Many projects instead opted to replace a presale with celebrity endorsement. This also meant, however, that investors lost key information and quality price signals that presales often generate the research showed. Taylor Swift was offered a deal to endorse FTX, but declined after doing a research on it. Wilcoff said celebrities should conduct due diligence and research any cryptocurrency related digital asset or exchange before endorsing it. I doubt she did her research on it. She probably just said no, because it was crypto and she didn't understand it, which is smart, right? Which is smart. And investors should not just blindly trust a celebrity endorsement, although maybe she's in crypto, because if you were in crypto, there were some interesting, you know, things happening with FTX. How do they get so big so fast? And that's really, I don't want to say I called it out. I did not do that, but I had an inkling that something weird was happening because all of a sudden FTX was rivaling the largest crypto exchanges in a span of two years. And I'm like, that sounds kind of weird, right? And I knew there were offshore. So that was like, I'm on now. I'll just keep my coin base account open as my on ramp and off ramp. But hopefully this video shed some light on some things, guys. And it's interesting out there. Hopefully this meets some people where they are in their crypto journey. But definitely these were some big, big issues that we saw in the last three years since I've been in crypto. And you know, hopefully you got some value out of this video. Appreciate it. Don't forget to subscribe. I'll see you in the next one. Bye.