Sunday, January 29, 2023

Celebrity Endorsements Questioned After Paris Hilton Drops LydianCoin

Celebrity Endorsements Questioned After Paris Hilton Drops LydianCoin

Recent problems surrounding LydianCoin, the ICO made famous by Paris Hilton, are shining a spotlight on celebrity cryptocoin investments. Investors are, as always, cautioned to check their emotion and research the assets they speculate on.

Also read: Puerto Rico Suffers Physical Cash Shortage After Power Grid Destroyed

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Hilton’s Ill-Fated Twitter Endorsement

LydianCoin raised a few eyebrows in the industry when Hilton’s tweet (now deleted) brought it to everyone’s attention. The project’s slick marketing video is packed with footage of scenery and its founder, and empty platitudes about success — but nothing about LydianCoin or what it’s supposed to do. There was something about A.I., blockchains and marketing at each end.

That founder, Indian-American adtech marketer Gurbaksh Chahal of parent company Gravity4, is himself under a cloud. He pled guilty to domestic abuse in 2014 after beating up his girlfriend in an incident caught on video. Sentenced to probation, he was again arrested in 2014 for assaulting a woman. Four former Gravity4 employees are suing for harassment and discrimination.

Chahal was sentenced to one year in prison for violating probation, but appealed — a series of events likely to come to a head soon.

Notably, LydianCoin and its ICO are still a going concern. Chalal has taken to Twitter to criticize other media outlets reporting this story.

LydianCoin Founder Faces Jail Time for Other Offenses

Four Forbes reporters dug into the background of Chahal and LydianCoin. They found there wasn’t much benefit to actually owning the asset — supposedly they were to pay for Gravity4’s marketing services and get a few sneak product previews. One included a “blockchain-driven anti-ad fraud system.”

Other than that, the main use-case of LydianCoin seems to be raising funds for Gravity4 and short-term token buyers.

Paris Hilton LydianCoin tweet

To be honest, few took it very seriously and LydianCoin would probably have gone unnoticed if not for Hilton’s tweet. But then, that’s the point of paying celebrities to tweet about you. For the record, Hilton’s spokesperson told Forbes she’s no longer associated with LydianCoin. What her exact involvement was beyond the tweet isn’t clear.

ICOs: Quick Pump or Long-Term Uses?

Many buy ICO tokens not because they show long-term promise, but in the hope they’ll escalate dramatically in value. The goal is then to sell and get out fast, and not get caught holding the bag. The actual use case for the tokens isn’t important for the buyers, or the issuers.

Bitcoin price moonNot all ICOs are alike. Whatever you think of their legality or economic feasibility, many projects at least are attempting to build a token that serves a real purpose on the platform. Maybe it’s as a “reserve currency” for exchanging assets, like Bancor‘s BNT or LakeBanker‘s BAC. These tokens intend to power their platforms in similar ways to Ripple’s XRP or Ethereum’s ETH.

Others appear to have little use, or have a vague use-case thrown in as an afterthought. For now, there’s technically nothing illegal about that — but regulators around the world are watching. The U.S. Securities and Exchange Commission issued an investor warning in July, while China has banned ICOs outright and ordered refunds. In Singapore, where LydianCoin Pte. Ltd. is based, it’s still a gray area.

The very existence of a celebrity endorsement should be enough to make a speculator think twice. Does the project offer anything besides? Is anyone talking about it other than the (presumably paid) endorser and reporters commenting on the endorsement?

Even those looking to make a quick and shallow buck might want to do a little digging in future — a paid celebrity endorsement may not be enough to carry a token to profits if other fundamentals are weak.

Have you ever invested in an ICO? What’s your opinion on them? Let us know.

Images via Twitter, Pixabay, CryptoPop!

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