In the aftermath of last year’s FTX collapse, crypto influencers have adopted a more cautious approach toward endorsement deals. The incident resulted in numerous celebrities facing lawsuits for their alleged involvement in promoting the now-infamous crypto exchange. A class-action lawsuit, amounting to $1 billion accused eight influencers of promoting “FTX crypto fraud without disclosing compensation.”
This wake-up call has prompted influencers to realize that endorsing crypto companies can lead to potential legal action from their followers if the company turns unfavorable. Tiffany Fong, a prominent crypto vlogger known for her interview with former FTX CEO Sam Bankman-Fried, is not interested in endorsing crypto firms on her social media platforms. Fong explained, “With so many once reputable companies collapsing, I am cautious about promoting anything that could harm customers.”
Fong disclosed that she had received multiple offers but has yet to respond to most due to the perceived risks outweighing the rewards. “I cannot quantify how much money I have turned down; I simply don’t entertain such offers at the moment.”
DeFi Dad, with a substantial following of 152,300 on Twitter, turned down a sponsorship opportunity from FTX. He reflected on his decision, “In retrospect, not working with FTX was the best decision, although I have no idea how much money I probably turned down.”
Marketing agencies responsible for connecting influencers with brand deals have observed concerns from both influencers and crypto firms. Nikita Sachdev, CEO and founder of Luna PR, explained that the increased scrutiny and legal concerns have made both parties more cautious. This has resulted in an overall decline in influencer deals, partly due to tighter budgets brought about by the extended crypto winter.
Rasmus Rasmussen, CMO of Polygon NFT game Planet IX, acknowledged that securing A-list influencers to promote crypto has become increasingly challenging since the FTX collapse. Many established influencers have taken a step back and reevaluated how they offer their services.
However, the fees associated with these endorsement deals are staggering. Crypto influencers have been known to charge six figures, reflecting their large following and reach. Some celebrities endorsing web3 projects demand fees in the millions.
On the other hand, Mason Versluis, also known as Crypto Mason on TikTok, has noticed an increase in crypto brand deals for the wrong reasons. The FTX saga unexpectedly expanded the crypto space, resulting in the emergence of new crypto businesses actively seeking influencers for brand partnerships.
Crypto vlogger MegBzk advises influencers to conduct thorough research before endorsing a firm. It is crucial to have a comprehensive understanding of the company and involve multiple individuals in assessing its credibility.
As the FTX collapse continues to cast a long shadow over the crypto influencer landscape, it serves as a reminder that responsible endorsements and careful due diligence are essential in protecting both influencers and their followers in the volatile world of cryptocurrency.