Report: Social media influencers are getting paid to advertise crypto
- Kim Kardashian West is promoting Ethereum Max, a crypto project without a white paper.
- Floyd Mayweather is also shilling the coin, and one of his matches was sponsored by the project.
- Experts believe cryptocurrencies promoted by social media influencers are quite risky.
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As the popularity of cryptocurrencies surges following their stellar performance this year, social media influencers are increasingly getting involved with the nascent sector. A report unveiled this news on June 15, noting that influencers such as the D’Amelio family, Tana Mongeau, and others have been posting paid crypto ads on their social media handles. The adverts are for a plethora of digital currencies and crypto exchanges.
According to the report, Kim Kardashian West, who has 228 million followers on Instagram, has joined this rapidly growing group. Allegedly, she posted an ad for Ethereum Max on her Instagram Story on June 13. The ad was followed by a short clip that saw her speaking about Ethereum Max with the word ad written at the bottom of the screen. In the post, Kardashian West asked her followers whether they are interested in crypto.
In the ad, the renowned influencer said that the post was not financial advice, seeing as she was only sharing what her friends had told her about the Ethereum Max token. According to her, the project had just burned 400 trillion, which purportedly accounts for approximately 50% of the coin’s total supply, to give back to the E-max community. The post contained multiple hashtags, including #ad, which shows that the post was paid for.
Such ads are likely to do more harm than good
Apart from Kardashian West, American professional boxing promoter, Floyd Mayweather also tried to promote the alternative cryptocurrency during the Bitcoin (BTC/USD) 2021 conference in Miami. However, he did not get a warm reception, seeing as the attendees booed him off the stage. The coin also sponsored the boxer’s recent fight with Jake Paul.
Despite Ethereum Max’s partnerships with renowned public figures, experts view it as an altcoin with vast risks. Reportedly, the project does not have a white paper like other coins in the crypto market. Apart from this, the public has very scarce information about the project’s developers.
According to James Ledbetter, an editor of fintech newsletter FIN and a CNBC contributor, crypto promotions become more problematic when the influencer does not disclose that they have been paid to post such information.
He noted that his main concern about such ads is that the audience is mostly financially unsophisticated and has limited access to funds. Ledbetter outlined that this is why this area has been subject to regulatory actions for many years.