{"id":19053,"date":"2023-06-05T00:27:28","date_gmt":"2023-06-05T00:27:28","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/crypto\/ftx-lawsuits-see-crypto-firms-influencers-dial-back-endorsement-deals\/"},"modified":"2023-06-05T00:27:31","modified_gmt":"2023-06-05T00:27:31","slug":"ftx-lawsuits-see-crypto-firms-influencers-dial-back-endorsement-deals","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/crypto\/ftx-lawsuits-see-crypto-firms-influencers-dial-back-endorsement-deals\/","title":{"rendered":"FTX lawsuits see crypto firms, influencers dial back endorsement deals"},"content":{"rendered":"
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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.\u00a0<\/p>\n

In March, a $1 billion class-action lawsuit was filed alleging that eight influencers promoted \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 unfavorable.<\/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\u2019t of interest to her at the moment.<\/p>\n

Tiffany Fong pictured with crypto commentator Benjamin Cowen. Source: Twitter<\/em><\/figcaption><\/figure>\n

\u201cSince so many once reputable companies have collapsed, I don\u2019t 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\u2019t \u201cresponded to most of them,\u201d as she believes the risks outweigh the reward.<\/p>\n

\u201cI don\u2019t know how much money I\u2019ve turned down; I\u2019m just not entertaining it at the moment.\u201d<\/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 to not 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

\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\u2019s not only influencers who are becoming more cautious about endorsement deals, 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 \u201chas been an overall decline in influencer deals.\u201d <\/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:\u00a0<\/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><\/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 \u201cfor the wrong reasons.\u201d<\/p>\n

Versluis explained to Cointelegraph that the FTX saga, 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\u00a0conduct their own research\u00a0before 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>\u2018Moral responsibility\u2019: Can blockchain really improve trust in AI?<\/em><\/strong><\/p>\n<\/div>\n