The rise of the influencer Crypto Con

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Since there is money, there have been crooks.

Take your news from TV and movies and you’d be forgiven for believing that all crooks are either rude types of Mr. Fagin (think Oliver Twist) or the kind of sugary, modest strangers you find cheating. watch the players intently at a roulette table. Think exclusively of online scammers and you can recall questionable emails from bogus companies, usually with a link attached that can drain your bank account at any time if you’re naive enough to click on it.

In 2021, however, the most ubiquitous scammers don’t have to hide or obscure their identities at all – in fact, they’re usually surprisingly easy to get to the top of your Instagram feed.

Kim Kardashian has been slammed for endorsing Ethereum Max crypto scheme

Celebrities and influencers have long been accused of scamming their fans and followers, whether it’s for offering them shoddy products at premium prices, misleading fans into buying sponsored products, or for having failed to report paying sponsors. Getting cheated out of money by a public figure you thought you trusted can be incredibly frustrating, but the last year saw the start of a sinister new trend.

There are now influencers whose fans don’t just waste $ 25 on substandard products, but suffer financial losses of thousands of dollars after being convinced to invest in cryptocurrency – all on the market. recommendation of their favorite influencers.

The rise of cryptocurrency over the past few years has been truly unprecedented.

It all started, of course, with the release of Bitcoin in 2009. After spending its first decade in relative obscurity (and used primarily in deep web and black market transactions), Bitcoin introduced the idea of ​​the cryptocurrency into the mainstream in 2017 after the value of one Bitcoin hit its highest price of $ 19,783 at the time. The Bitcoin boom, despite fluctuating prices in the years that followed, immediately made it clear to the world’s most passionate financial traders that there was a lot of money to be made in the cryptocurrency world.

Of course, since there are a multitude of global currencies of varying value, there was room for a lot of cryptocurrency competition, which led to the emergence of several Bitcoin competitors over the next few years. Nowadays, it’s hard to know how many cryptocurrencies there are, i.e. if you pay little attention to Instagram.

Eager to capitalize on the rise of cryptocurrency – and encouraged by the boom in cryptocurrencies such as Dogecoin, initially billed as a joke – crypto creators have brought in influencers and celebrities to make the pitch. advertising their own Internet savings. Of course, with such fierce competition, these new cryptocurrencies aren’t designed for longevity. Those behind the companies are happy to shell out thousands (probably in USD rather than crypto) in numbers with the platforms to promote them to their fans, many of whom then invest, thus creating and boosting their own ecosystem.

The celebrity movement promoting crypto is nothing new, although it really did come under a microscope in June this year when a Kim Kardashian Instagram story came under fire.

ARE YOU IN THE CRYPTO ???, she asked her 254 million followers.

THIS IS NOT FINANCIAL ADVICE BUT SHARE WHAT MY FRIENDS JUST TELL ME ABOUT THE TOKEN ETHEREUM MAX

A FEW MINUTES AGO ETHEREUM MAX BURNT 400 TILLION TOKENS – LITERALLY 50% OF THEIR ADMIN PORTFOLIO GIVING BACK TO THE ENTIRE E-MAX COMMUNITY

Many recognized the Ethereum Max crypto system as one previously promoted by Floyd Mayweather at a crypto convention, which saw it booed from the scene soon after.

While Kim’s post may mark the most people reached with a single Instagram crypto endorsement, it was by no means the first – she was the latest in a long line of internet celebrities to advertise. for crypto to their subscribers.

Internet and reality star Tana Mongeau is no stranger to controversy, so fans weren’t particularly surprised when she jumped on the cryptocurrency bandwagon on Instagram advertising Titscoin, a cryptocurrency believed to have been created for the purpose of raising awareness for breast cancer research. However, critics were quick to point out that there are much more legitimate ways to do it, pointing out that tying a charitable cause to the currency was likely nothing more than a way to boost its popularity and cover up accusations of unethical practices. There was, for many, something quite sinister about cryptocurrencies exploiting the idea of ​​charity in order to gain investors.

it was also criticized for the wording of its ad, in which it stated that she was making money by the pool side, which many considered to be misleading and simplified how difficult it is to make money by using a flash-in-the-pan crypto system like Seinscoin.

Her former husband, Jake Paul, was no different. The vlogger-turned-boxer has previously spoken about his investment in several different cryptocurrencies, including Yummy Coin, whose main company claims to have donated thousands to the hungry and homeless. He has since told his followers, like Kim Kardashian, that his crypto recommendations are not financial advice – although he himself has openly spoken of designing his own cryptocurrency for public purchase.

Jake Paul has been slammed for advertising Yummy Coin to his young fanbase

The latter two raise two of the most important public concerns about cryptocurrency. First, that a growing number of crypto companies are using charity as a way to deflect their own devious behavior and second, that the use of celebrities to advertise cryptocurrency leads to an increase in the number of people investing. which they cannot afford due to a misunderstanding of the reliability of cryptos.

More worryingly, many celebrities promoting such coins have well-known young fans. Both Tana Mongeau and Jake Paul are popular figures among teens and young people in their twenties, the latter being a particularly common age among early crypto investors in recent years.

This trend is further reinforced by promotions posted by the DAmelio family from their shared Instagram account on behalf of crypto firm Gemini. Daughter Charli is, of course, only 17 – a year below the minimum age set by Gemini themselves. While there is currently no legal age rule in place for crypto buyers, it’s hard to imagine a teenager having the financial savvy to understand such an investment. Charli might have a team around her to take care of her money, but the majority of young people who get carried away by unfortunate crypto investments don’t.

Many seasoned investors don’t see the issues with the rise of celebrity crypto ads – but seasoned investors, in most cases, are not the target audience. The reality is that very few new cryptocurrencies will ever rise in value to the Bitcoin or Dogecoin level, which means that many undereducated first-time crypto investors are likely to lose money – money. that they may have been persuaded to invest because of celebrity endorsement.

There is certainly money to be made in crypto for those familiar with the movement, but plenty of celebrity mentions give investors the impression that crypto can be used as a way to get rich overnight – qu investing in crypto is so easy that anyone can do it and make money from it. In reality, the market has become oversaturated, which means that currencies that are cheaper to invest in or which have only recently hit the market are likely to collapse in the near future. In the crypto world, there simply aren’t enough available seats at the table for everyone to dine.

The increase in the number of young people investing in crypto, especially as a result of celebrity endorsement, has led to an increase in calls for closer scrutiny of crypto ads by the ASA and the FTC, the authority for crypto ads. UK and US advertising standards respectively. For now, however, the advice is that people targeted by celebrity crypto mentions that simplify the experience of investing in crypto take the ads with a grain of salt – and pay close attention to that famous slogan, it is NOT financial advice.

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