FTX lawsuits see crypto firms, influencers dial back endorsement deals

FTX lawsuits see crypto firms, influencers dial back endorsement deals

Crypto influencers are hesitant to accept lucrative sponsorship offers after they have seen what can happen if the company’s plans go wrong.

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Since the collapse of FTX, a crypto exchange last year, several celebrities have been sued for their alleged involvement in its promotion.

In March, a class-action lawsuit for $1 billion was filed claiming that eight influentials promoted FTX crypto fraud while not disclosing any compensation.

Influencers have told Cointelegraph it’s served as a warning — those who endorse crypto firms should understand that their followers may take legal action in the future if that company turns out to be unfavorable.

Tiffany Fong is not interested in promoting crypto companies on social media. She gained fame after interviewing the former FTX CEO Sam Bankman Fried following the collapse.


Tiffany Fong pictured with crypto commentator Benjamin Cowen. Source: Twitter

Fong told Cointelegraph that “since so many companies, once reputable, have gone under I do not want to promote any product or service that might swindle customers.”

Fong said she’s received many offers, but she hasn’t “responded” to them all because she feels the rewards outweigh the risks.

“I’m not interested in the money at this time.”

DeFi Dad has 152.300 followers on Twitter. He said that he was offered the chance to have FTX sponsor his content.

He said, “I don’t know how much money I turned down because I chose not to work with FTX. But it was the right decision in retrospect.”

Fears from both sides have been noticed by marketing agencies who bring influencers together with brand deals.

Nikita Sachdev is the CEO and founder at Luna PR. She told Cointelegraph, that not only are influencers becoming more cautious when it comes to endorsements but crypto firms as well.

The increased scrutiny and legal concerns has made influencers and cryptocurrency firms more cautious in their collaborations.

Sachdev noted that the extended Crypto Winter has forced crypto firms tighten their budgets, and that “there has been an overall decrease in influencer deals.”

Rasmus Rasmussen is the chief marketing officer for Polygon NFT, Planet IX. He told Cointelegraph it has become more difficult to secure A-list influencers in order to promote cryptocurrency after FTX collapsed.

Many more established influencers have taken a backward step and re-evaluated the way they provide services.

The fees charged for these transactions are staggering.

“We’ve seen influencers in the crypto space charge sponsorship deals up to six figures, often as a result of their popularity and reach. Sachdev said that celebrities who endorse web3 projects charge millions of dollars.

Former SEC Chief warns crypto influencers of prosecution for price manipulation

Mason Versluis has also noticed an increase in crypto-brand deals, but for the wrong reasons.

Versluis told Cointelegraph the FTX saga had, surprisingly expanded the crypto-space, resulting in new crypto businesses and influencers actively seeking brand deals.

SBF’s global coverage brought crypto and crypto businesses to the forefront of many people’s minds.

MegBzk, a crypto vlogger, suggests that influencers should do their own research prior to endorsing firms.

She said, “You should know your colleagues inside out to the best you can. Have multiple people review them.”

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