Since the collapse of the crypto exchange FTX last year, crypto influencers have adopted a more cautious approach to endorsement deals, given the legal repercussions faced by several celebrities allegedly involved in its promotion. An ensuing $1 billion class-action lawsuit accused eight influencers of promoting “FTX crypto fraud without disclosing compensation.” This incident has served as a wake-up call for influencers, reminding them that endorsing crypto firms may expose them to legal action if the company’s actions turn unfavorable.
Crypto influencers now prioritize consumer protection
In light of these concerns, popular crypto vlogger Tiffany Fong has refrained from endorsing crypto firms on her social media channels. Having gained fame by interviewing former FTX CEO Sam Bankman-Fried after the collapse, Fong is currently uninterested in promoting anything that could potentially harm customers. She has received numerous offers but has chosen not to respond, believing that the risks outweigh the rewards.
DeFi Dad, a Twitter influencer with 152,300 followers, also declined an opportunity to have his content sponsored by FTX. Although unsure of the exact amount of money he turned down, he considers it the best decision in hindsight. Marketing agencies that facilitate influencer-brand deals have observed cautious behavior from both influencers and crypto firms. The increased scrutiny and legal concerns have led to more careful collaborations between the two parties.
The extended crypto winter has compelled crypto firms to tighten their budgets, resulting in an overall decline in influencer deals. The collapse of FTX has made securing A-list influencers for crypto promotion increasingly challenging, according to Rasmus Rasmussen, the chief marketing officer of Polygon NFT game Planet IX. Well-established influencers have reevaluated their services and approach, considering the potential risks involved.
Firms are collaborating with influencers to change the collaboration approach
While the cautionary stance is prevalent, the fees associated with successful endorsement deals remain substantial. Some crypto influencers charge as high as six figures for sponsorship deals, depending on their following and reach. Notably, certain celebrities endorsing web3 projects demand fees in the millions. However, Mason Versluis, known as Crypto Mason on TikTok with over a million followers, has experienced an increase in crypto brand deals that may not align with the industry’s best interests.
To navigate these challenges, crypto vlogger MegBzk advises influencers to conduct thorough research before endorsing a firm. It is essential to have a comprehensive understanding of the company and involve multiple perspectives in the evaluation process.
The FTX lawsuit has cast a shadow of caution over the crypto influencer space. Influencers, as well as crypto firms, have become more meticulous in their collaborations, considering the potential legal and financial risks involved. As the industry evolves, influencers will continue to weigh the benefits against the drawbacks, ensuring that their endorsements align with their followers’ best interests and protect their reputation in the crypto community.