Web3 projects have been gaining immense popularity lately, and it's not surprising that many people are jumping on the bandwagon. However, the rise of these projects has also brought with it a concerning trend: influencers promoting fake or scam projects without conducting proper background checks.
Influencers, who have millions of followers, can make a huge impact on the success of web3 projects. They can bring awareness to new projects, increase visibility, and help generate hype. But with great power comes great responsibility, and many influencers are not taking that responsibility seriously. Some are promoting fake projects, and as a result, their followers are falling for scams.
One recent example of a fake project being promoted by influencers is the "Save The Kids" cryptocurrency. Several high-profile influencers, including TikTok star Bryce Hall, promoted the cryptocurrency without doing a proper background check. It was later revealed that the project was a scam, and investors lost millions of dollars.
The "Save The Kids" incident is not an isolated case. Many influencers are promoting web3 projects without conducting thorough research, and as a result, their followers are falling victim to scams.
Another case was of Kim Kardashian and Floyd Mayweather when they mislead investors by promoting EthereumMax, a little-known cryptocurrency, to millions of their social media followers. The post said,
"Are you guys into crypto???? This is not financial advice but sharing what my friends just told me about the Ethereum Max token! A few minutes ago Ethereum Max burned 400 trillion tokens—literally 50% of their admin wallet giving back to the entire E-Max community."
For this, they also faced a class-action lawsuit filed in the U.S. District Court for the Central District of California. The lawsuit claimed that the celebrities and EthereumMax worked together to artificially inflate the token's price by making false or misleading statements in social media posts. The lawsuit also revealed that the celebrities' conduct caused investors to suffer losses. EthereumMax lost over 97% of its value, leading some to label it as a "pump and dump" scheme.
The lawsuit also claimed that plaintiff Ryan Huegerich, a New York resident, and other investors who purchased EthereumMax tokens between May 14, 2021, and June 17, 2021, suffered losses as a result of the celebrities' conduct. This incident raised questions about the trustworthiness of influencer marketing in promoting crypto or web3 projects.
One reason is that they are being paid to do so. Many web3 projects have large marketing budgets and are willing to pay influencers large sums of money to promote their projects. This has led to a situation where influencers are promoting projects solely for financial gain, without considering the risks involved.
Another reason is that influencers may not have the knowledge or expertise to properly evaluate web3 projects. Many influencers are not experts in the field of blockchain or cryptocurrency, and as a result, they may not be able to spot potential red flags in a project.
The answer is not straightforward. While there are many trustworthy and responsible influencers out there, there are also many who are not. It's important to remember that influencers are not experts in the field of blockchain or cryptocurrency, and may not have the knowledge or expertise to properly evaluate web3 projects. This means that it's important for investors to conduct their own research and due diligence before investing in any web3 project, and not to rely solely on the opinions of influencers.
Additionally, it's essential that influencers take their responsibility seriously and conduct proper background checks before promoting any web3 projects. They should be aware of the risks involved and ensure that they are not promoting fake or scam projects. If they are being paid to promote a project, they should disclose this information to their followers.
And for investors, it's essential to conduct thorough research and due diligence before investing in any web3 project. Don't fall for the hype and always question the legitimacy of any project before investing your hard-earned money.
The rise of web3 projects is an exciting development, and it has the potential to change the world. However, it's important to remember that with great power comes great responsibility. Influencers should use their platforms to promote legitimate projects and provide valuable insights to their followers. Only then can we ensure that the web3 ecosystem is a safe and secure place for everyone.