There has been a long upstanding debate in India about celebrities being held liable for the brands they endorse, and some of them are now learning their lesson the hard way.
Enforcement Directorate (ED), the intelligence agency responsible for fighting economic crimes in India, is questioning several celebrities with regards to their involvement in a $300 million cryptocurrency scam, led by now-imprisoned entrepreneur Amit Bharadwaj.
One of them is porn star turned Bollywood actress Sunny Leone.
Bitcoin scam
The celebrities allegedly promoted the company owned by Bharadwaj in Dubai and Singapore. Bharadwaj, a Pune-based businessman, was arrested six months ago from the Indira Gandhi International airport in New Delhi.
He had allegedly flown away after duping over 8000 people in a Ponzi scheme.
Bhardwaj founded a series of Bitcoin mining firms such as Gain Bitcoin, GB Miners, and MCAP, promising a 10 times return for investors. He had lured people to invest in bitcoins for 18 months. Needless to say, none of these exuberant high-return promises panned out; instead, investors ended up losing money.
Bhardwaj was arrested in April by Indian police and has been under custody since then. After interrogating him, police is now reportedly questioning people associated with him and his companies.
The Enforcement Directorate then questioned businessman and Bollywood actress Shilpa Shetty’s husband Raj Kundra, which led to more celebrities who promoted GBMiners at various events in Dubai and Singapore. The most prominent name on the list is Sunny Leone, the adult film star turned Bollywood actress.
The rest of the list also features film actresses that any Bollywood fan can recognize in a jiffy: Prachi Desai, Aarti Chabria, Sonal Chauhan, Karishma Tanna, Zareen Khan, Neha Dhupia, Huma Qureshi, Nargis Fakhri, and Kundra’s wife Shilpa Shetty.
However, it appears none of the celebrities have been indicted in the scam so far. They are being questioned about their promotional activities in relation to Bharadwaj’s companies.
This is not the first time that celebrities are getting in trouble for promoting cryptocurrency projects or initial coin offerings (ICOs) that prove to be fraudulent — Floyd Mayweather, DJ Khaled, and Steven Seagal have all been there.
The US Securities and Exchange Commission (SEC) even issued a warning against celebrity-backed ICOs last December, noting that such sponsored endorsements are illegal if the celebrity fails to disclose their relationship (or stake) with the cryptocurrency.
It seems India could benefit from similar legislation.
One Response
“If it sounds too good to be true it usually is.”
“Greedy fools and their money will soon part ways.”
There is a reason these old sayings have been around a long time.