Paris Hilton is getting in on the ICO hype.
Initial Coin Offerings, or ICOs, are the hottest new fundraising tool in tech right now. Using blockchain technology, they allow startups to bypass traditional financiers like venture capital and raise money directly from anyone.
They’re an unregulated Wild West, bringing in billions this year – and now celebrities are getting involved.
On Sunday, media personality and businesswoman Paris Hilton wrote on Twitter that she is “looking forward to participating in the new” LydianCoin – a platform that wants to combine the blockchain with “targeted, AI driven digital marketing and advertising services.”
It is run by advertising-tech company Gravity4, whose CEO Gubaksh Chahal pleaded guilty to assault in 2014 after being accused of beating his girlfriend, and was accused of violating his probation by assaulting another woman.
According to its white paper, Lydian aims to raise $100 million by selling 20 million coins at $5 a pop.
Hilton’s not the first celeb to promote ICOs.
Floyd Mayweather was early to the game, hyping up prediction market Stox in July. “I’m gonna make a $hit t$n of money on August 2nd on the Stox.com ICO,” the boxer wrote on Instagram, alongside a photo of him sitting on a private jet next to literal piles of money.
Stox went on to raise $30 million (£23 million) – and was subsequently promoted by another high-profile sportsperson on Instagram, Uraguayan footballer Luis Suarez.
In August, Mayweather was back at it again, signalling his support for the ICO of Hubii Network, a decentralised media marketplace.
“You can call me Floyd Crypto Mayweather from now on,” he wrote on both Twitter and Instagram. (This second post was hashtagged #ad, suggesting Mayweather was being paid for his support. It’s not clear what he invested in either case.)
Another high-profile ICO advocate is The Game.
The American rapper has teamed up with Jess VerSteeg, an entrepreneur and Miss Iowa 2014, to kickstart a “cannabis revolution.” To this end, he is sitting on the advisory board of Paragon, a tech firm that wants to use the blockchain to shake up the marijuana market.
It aims to raise $100 million (£77 million) selling tokens in an ICO, and The Game (who is also an established marijuana entrepreneur) has been hyping it on Twitter.
— Black Jesus (@thegame) August 10, 2017
According to one estimate, initial coin offerings raised more money than established venture capital early-stage funding in 2017 so far. But there are also concerns that we are witnessing a vast asset bubble, and US regulator the SEC has warned about scams as it looks into whether some ICOs are really unlicensed securities sales.
Together, these celebrity endorsements are evidence of how increasing effort is being made to push ICOs and cryptocurrency products into the mainstream, and to attract investment from ordinary people.
But given the concerns around the space, not everyone thinks this is the smartest idea.
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