Crypto marketing needs to change. Let’s make 2023 the year of influencer accountability

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Sold out a beachside paradise with A-list models including Kendall Jenner, Millennials invaded the Bahamas in 2017 for the ill-fated Fyre Festival.

We all know what happened next: local businesses destroyed, cheese sandwiches run down, and customers cheated who filed a class action lawsuit against organizers who used their money to fund decadent lifestyles. At the heart of the media circus was the role of influencer marketing. Failing to properly review the new concept or disclose financial dealings to Fyre, the celebrities crumbled after government agencies came knocking. Jenner, for example, was forced to pay $90,000 out of pocket for her role in promoting the festival.

Nemo Yang is the founder and CEO of Oxygen, the Web3 marketing platform.

From the tropical surroundings to the dynastic celebrity families involved, Fyre Festival mirrors the collapse of FTX and other major crypto scandals that have erupted in recent months. Despite the lack of regulatory clarity surrounding crypto, let alone the compliance scrutiny traditional financial institutions face, Tom Brady gave FTX his stamp of approval as Sam Bankman-Frieds’ team lost ground. billion while racking up $55,000 bar at Jimmy Buffets Margaritaville in the Bahamas. Kendall Jenners half-sister Kim Kardashian also found herself in the crosshairs of regulators and had to pay a $1.26 million fine for essentially promoting ethereumMax, a pump and coin system. dump. In another twist of irony, the Great Exuma land where Billy McFarland held Fyre is now being sold as non-fungible token (NFT) packages, marketed for crypto heads by the same developers behind Miami Beachs Setai hotel. .

Celebrities and their managers who present advertising opportunities have a responsibility to fans and followers to properly verify products and services and to truly understand what they are promoting. While most Web3 builders understand the risks of investing in cryptocurrency projects and have a sense of the terrain regarding DeFi architecture, Kim Kardashian’s 228 million Instagram followers are unlikely to know much about it. topics such as portfolio allocation. These are sheep led to the slaughterhouse by someone who has never even dared to comment on Ethereum.

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Celebrities, unfortunately, are only part of the problem with the current state of crypto marketing. An industry of Web3 YouTubers, Twitch streamers and TikTok stars has emerged during the coronavirus pandemic. While most of these creators posted videos in good faith and wanted to share their passion for crypto and blockchain, there are, unfortunately, others who profited from retail, failing to disclose when they were paid for shill or when they took profit.

Read more: Jocelyn Yang – Read ‘Em and Weep: Five Crypto Influencers Who Abused Their Followers

To create a Web3 free of malicious actors promoting pump and dump schemes, incentive structures must change for crypto marketing. While the U.S. Federal Trade Commission already requires individuals to disclose payments for promotions, Web3 is full of unproven startups, value propositions, and teams that require even greater accountability. Promoters in this space should explain why they chose to align with certain brands. Unlike skincare products or commodities, cryptocurrencies have a direct impact on financial markets and carry risks of trading derivatives and contagion to other institutions. With all transactions visible on a public ledger, blockchain technology is designed with transparency in mind. Those who promote the virtues of technologies must respect this essential principle from a legal and moral point of view, and the industry must hold them accountable.

Crypto Influencer Trading Cards (3Hunna S. Thompson/CoinDesk)

Crypto influencers, marketers and PR professionals need to spend more time digging into the fundamental architecture of blockchains and uncovering their own ideology towards crypto and decentralization as a guiding force in selecting projects to approve. Only by educating themselves first can they educate others. This statement should be obvious, but in the wake of the failure of the FTX and Celsius networks, the industry must adopt a zero-tolerance policy for promoters who overtly hype brands without understanding or respecting the core technology.

As a first step, companies and influencers should start measuring their social media reach for campaigns to quantify their potential impact on financial markets and large swaths of the population. Oxygen is on a mission to bring transparency to Web2 and Web3 growth marketing by using data analytics to understand online creators and brands, as well as relevant on-chain activity, to verify their legitimacy. . We’ve also seen our industry partners like CreatorDAO, a funding and technology platform helping creators, play an active role in educating influencers on advertising best practices to protect their audiences. By being transparent with who they target and how they do so, marketing teams will take an important step in embracing accountability.

Crypto marketing in 2023 will inevitably be defined by the establishment of new regulatory frameworks, but will also require the adoption of a new culture and attitudes. Those responsible for promoting crypto companies to the general public should be able to, at a minimum, explain how their concept fits into the overall blockchain ecosystem, from protocol level to consensus.

People in positions of authority in Web3 (VCs, Founders, etc.) can highlight individuals who promote companies in good faith, recognize when they are wrong, and are enthusiastic about the ideologies behind the code rather than by associations of interchangeable brands of centralized interest groups.

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