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Crypto influencers are taking an extra cautious approach to endorsement deals since the collapse of crypto exchange FTX last year, which has seen several celebrities hit with a lawsuit for their alleged role in its promotion. <\/p>\n
In March, a $1 billion class-action lawsuit was filed alleging that eight influencers promoted<\/a> \u201cFTX crypto fraud without disclosing compensation.\u201d <\/p>\n Influencers told Cointelegraph that it has served as a wake-up call \u2014 those that endorse crypto firms need to understand their followers can take legal action against them in the future should that company turn unfavourable.<\/p>\n For crypto vlogger Tiffany Fong, who gained fame by interviewing former FTX CEO Sam Bankman-Fried after the collapse, endorsing crypto firms on her social media isn’t of interest to her at the moment.<\/p>\n \u201cSince so many once reputable companies have collapsed, I don’t want to promote anything that could potentially rug customers,\u201d Fong told Cointelegraph.<\/p>\n Fong admitted she has received a lot of offers but hasn’t “responded to most of them,” as she believes the risks outweigh the rewards.<\/p>\n \u201cI don’t know how much money I’ve turned down; I’m just not entertaining it at the moment.”<\/p><\/blockquote>\n DeFi Dad, who has 152,300 followers on Twitter, said that he had been proposed an opportunity to have his content sponsored by FTX.<\/p>\n \u201cI have no idea how much money I probably turned down by opting not to work with FTX but it was the best decision in retrospect,\u201d he said.<\/p>\n Marketing agencies that bring together influencers and brand deals have noticed fears from both sides of the business.<\/p>\n funny to see some of these influencers risking their entire reputation creating these for quick $$$<\/p>\n \u2014 ZachXBT (@zachxbt) May 6, 2023<\/a><\/p><\/blockquote>\n Nikita Sachdev, CEO and founder of Luna PR, explained to Cointelegraph that it’s not only influencers who are becoming more cautious about endorsement deals<\/a>but also crypto firms themselves, noting:<\/p>\n \u201cThe increased scrutiny and legal concerns have made both influencers and crypto firms more careful in their collaborations.\u201d<\/p><\/blockquote>\n Sachdev pointed out that the extended crypto winter has forced crypto firms to tighten budgets and that there “has been an overall decline in influencer deals.” <\/p>\n Rasmus Rasmussen, chief marketing officer of Polygon NFT game Planet IX, told Cointelegraph that securing A-lister influencers to promote crypto has become increasingly challenging after the collapse of FTX, noting: <\/p>\n \u201cA lot of more well-established influencers seem to have taken a step back and considered the way they offer services.\u201d<\/p><\/blockquote>\n However, the fees being charged when these deals are executed is staggering.<\/p>\n \u201cWe have seen crypto influencers charge as high as 6 figures for sponsorship deals, which is often a reflection of their following and reach. We have also come across celebrities endorsing web3 projects, who charge in the millions,\u201d Sachdev added.<\/p>\n Related: <\/em><\/strong>Former SEC chief warns influencers about prosecution for crypto price manipulation<\/em><\/strong><\/a><\/p>\n Meanwhile, Mason Versluis, who posts as Crypto Mason to over a million followers on TikTok, has seen an increase in crypto brand deals “for the wrong reasons.”<\/p>\n Versluis explained to Cointelegraph that the FTX saga has, surprisingly, expanded the crypto space, leading to new crypto businesses emerging and actively seeking influencers for brand deals.<\/p>\n \u201cA lot of people were reminded about crypto and building crypto businesses when SBF made headlines globally.\u201d<\/p><\/blockquote>\n Crypto vlogger MegBzk suggests influencers need to conduct their own research<\/a> before endorsing a firm.<\/p>\n \u201cYou need to know inside and out who you are working with, to the best of your ability [and] have multiple people look at them,\u201d she said.<\/p>\n Magazine: <\/em><\/strong>‘Moral responsibility’: Can blockchain really improve trust in AI?<\/em><\/strong><\/a><\/p>\n <\/div>\n\n