The collapse of crypto exchange FTX last year has led to crypto firms and influencers re-evaluating endorsement deals, taking a more cautious approach in light of the potential legal repercussions. A $1 billion class-action lawsuit was filed against eight influencers, alleging promotion of “FTX crypto fraud without disclosing compensation.” This served as a wake-up call for influencers, reminding them that their followers could take legal action against them in the future if a company they promoted were to turn unfavorable.
Crypto vlogger Tiffany Fong, who garnered attention by interviewing former FTX CEO Sam Bankman-Fried after the collapse, has expressed her disinterest in endorsing crypto firms on her social media at the moment. Fong stated that she has received numerous offers but hasn’t responded to most, as she believes the risks outweigh the rewards.
Moreover, marketing agencies that connect influencers and brand deals have noticed concerns from both parties. Nikita Sachdev, CEO and founder of Luna PR, explained that not only influencers but also crypto firms themselves are becoming more cautious about endorsement deals due to increased scrutiny and legal concerns. Sachdev also pointed out that the extended crypto winter, which forced crypto firms to tighten budgets, led to an overall decline in influencer deals.
Despite the challenges and risks, the fees charged for these deals can be incredibly high, with some crypto influencers charging six figures for sponsorship deals. Celebrities endorsing web3 projects have also been known to charge in the millions.
Crypto vlogger MegBzk suggests influencers need to conduct their own thorough research before endorsing a firm, involving multiple people to understand the company they are working with inside and out.
In conclusion, the collapse of FTX has undoubtedly affected the crypto influencer space, with both influencers and crypto firms growing more cautious about endorsement deals. While the fees charged can be lucrative, the potential legal repercussions have led many to reconsider if the risks truly outweigh the rewards.
Source: Cointelegraph
