In the aftermath of last year’s FTX collapse, crypto influencers have adopted a more cautious approach to endorsement deals. The incident resulted in many celebrities facing lawsuits for their alleged involvement in promoting the now famous crypto exchange. The $1 billion class action lawsuit accuses eight influencers of promoting “FTX crypto scam without disclosing compensation.”
This warning has prompted influencers to recognize that supporting crypto companies could lead to potential legal action from their followers if the company becomes unprofitable. Tiffany Fong, a prominent crypto vlogger known for her interview with former FTX CEO Sam Bankman-Fried, has no interest in supporting crypto companies on her social media platforms. Fong explains, “With so many once-reputable companies collapsing, I’m wary of promoting anything that could hurt customers.”
Fong reveals that he has received many offers but has not responded to most because the perceived risk is greater than the reward. “I cannot count how much money I have turned down; I really don’t accept offers like that at the moment.”
DeFi Dad, with 152,300 followers on Twitter, turned down sponsorship opportunities from FTX. He reflected on his decision, “In hindsight, not working with FTX was the best decision, though I don’t know how much money I might have turned down.”
Marketing agencies responsible for linking influencers with brand deals have observed concerns from both influencers and crypto companies. Nikita Sachdev, CEO and founder of Luna PR, explained that increased scrutiny and legal issues have made both parties more careful. This resulted in an overall drop in influencer deals, partly due to tighter budgets resulting from the extended crypto winter.
Rasmus Rasmussen, CMO of Polygon NFT Planet IX games, admits that securing A-list influencers to promote crypto has become more and more challenging since the FTX collapse. Many established influencers are taking a step back and re-evaluating how they offer their services.
However, the costs associated with these endorsement deals are staggering. Crypto influencers are known to have six figures, which reflect their large number of followers and reach. Some celebrities who support the web3 project demand millions in fees.
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 story has unexpectedly expanded the crypto space, resulting in the emergence of new crypto businesses that are actively seeking influencers for brand partnerships.
Crypto vlogger MegBzk advises influencers to do thorough research before endorsing a company. It is very important to have a comprehensive understanding of the company and involve multiple individuals in assessing its credibility.
As the FTX collapse continues to cast a shadow over the crypto influencer landscape, it serves as a reminder that responsible support and careful due diligence are essential in protecting influencers and their followers in the volatile cryptocurrency world.