Due to the FTX lawsuit, crypto influencers are rejecting lucrative endorsement offers over concerns about the company’s future.
Since the crypto exchange FTX collapsed last year, several celebrities have been sued for their alleged role in its promotion. As a result, crypto influencers are taking extra precautions with endorsement agreements.
A $1 billion class action lawsuit was filed in March, alleging that eight influencers promoted “FTX crypto fraud without disclosing compensation.”
Influencers say that it has served as a wake-up call, warning those who endorse crypto firms that their followers may sue them if the company becomes unfavorable.
Crypto vlogger Tiffany Fong, who garnered fame by interviewing former FTX CEO Sam Bankman-Fried after the collapse, is not currently interested in endorsing crypto firms on her social media channels.
“I don’t know how much money I’ve turned down; I’m just not entertaining it at the moment.”
In addition, DeFi Dad, a Twitter user with 152,300 followers, reported that FTX had offered to sponsor his content. “I have no idea how much money I probably turned down by opting not to work with FTX, but it was the best decision in retrospect,” he added.
Nikita Sachdev, CEO and founder of Luna PR explained that not only are influencers becoming more wary of endorsement agreements, but so are crypto companies themselves.
“The increased scrutiny and legal concerns have made both influencers and crypto firms more careful in their collaborations.”
Sachdev noted that the prolonged crypto winter has forced crypto firms to reduce spending and that influencer deals have decreased in general.
Rasmus Rasmussen, chief marketing officer of Polygon’s NFT game Planet IX, stated that securing A-list influencers to promote crypto has become more difficult following the demise of FTX.
“A lot of more well-established influencers seem to have taken a step back and considered the way they offer services.”
Mason Versluis, who uses the alias Crypto Mason on TikTok and has over a million followers, has observed an increase in crypto brand agreements “for the wrong reasons.”
Versluis explained that the FTX saga unexpectedly expanded the crypto space, resulting in new crypto businesses actively pursuing influencers for brand partnerships.
