Consensus Magazine: What Taylor Swift Can Teach You About Investing
Investors in failed cryptocurrency brokerage FTX are still looking to be made whole. One of many lawsuits has gone out against a number of celebrities who endorsed the company during its heyday.
However, one celebrity spokesperson isn’t on the list. That’s pop musician Taylor Swift. She turned down a $100 million sponsorship with FTX. While that’s a big chunk of change even for her, it’s also a sign of a key investment lesson.
The lesson? Do your homework. Swift reportedly met with representatives at FTX and asked about the company’s listed assets. Specifically, she wanted to know if they were unregistered securities.
Right now, securities law hasn’t caught up to cryptocurrencies. And many see cryptos as unregulated securities, as they have similar characteristics. Only big-name cryptos such as bitcoin and Ethereum are likely to avoid significant scrutiny from regulators.
This question kept Swift out of a deal. And it didn’t even involve asking the company about its financial status and management. Those are the kinds of questions that potential investors – or spokespersons – should be asking.
During the crypto boom, asking any questions about the legality or safety of potential returns would have likely led to someone moving on to the next opportunity. Amid the crypto bust, it’s clear that asking questions about any investment, and thinking through potential dangers, can save a big headache later on.