- Cameo was once a tech unicorn, valued at over $1 billion just three years ago.
- Now it can't pay a $600,000 fine, according to a recent settlement document.
- The company violated FTC rules for celebrity endorsement disclosures.
Cameo was once a tech darling. In 2021, the company reached a $1 billion valuation following a $100 million investment after the app — which allows people to pay celebrities for short video messages — became a phenomenon during the coronavirus pandemic.
Now, Cameo can't even pay a $600,000 fine.
Cameo's dire cash straits were disclosed in a settlement agreement made public Wednesday by the office of New York Attorney General Letitia James.
The company failed to properly comply with Federal Trade Commission rules about celebrity product endorsements. Cameo should pay a $600,000 fine for its violations, the agreement said, but it can't afford it. So New York and the other 29 states involved in the investigation are accepting a measly $100,000 instead to be split between them.
"Due to Cameo's inability to pay $600,000.00, as demonstrated by Cameo's 2021 and 2022 audited financial statements, and additional representations made about Cameo's financial status in October 2023, the Settling States and Cameo agree and stipulate that upon receipt of $100,000.00 from Cameo, the Settling States shall suspend the remaining amount due," the settlement agreement says.
Cameo is also required to implement features for future compliance, including watermarks, requirements for brands and celebrities to acknowledge the endorsement regulations, and ongoing monitoring for noncompliance, per the settlement agreement, which was signed on July 15.
This includes maintaining a watermark system to indicate a video was booked through Cameo, requiring acknowledgments from brands and celebrities that they must comply with rules and regulations around endorsements, creating a reporting system, and monitoring for noncompliance.
Cameo has fallen on hard times since reaching unicorn status in 2021. It has never been able to attract many A-list celebrities to its platform and had several rounds of layoffs in 2022 and 2023. Most recently, it was in the news for becoming a source of income for George Santos after he was expelled from the House of Representatives.
According to the settlement agreement, New York and the other states involved are permitted to go after Cameo for the full $600,000 — plus interest — if it can't pay the $100,000 in the next three years. Cameo would also be responsible for the full bill if it files for bankruptcy within 91 days.
Representatives for Cameo didn't respond to a request for comment.