The concept of this digital technology depends largely on sentiments as it drives market confidence. Therefore, while what such individuals are doing is harmful to the market at large, they hold sway in the minds of their audience.
A study from daapGambl alleged that one-third of crypto influencers on Tiktok deceive their audience with fake information.
Tiktok, with over 1 billion active users, is one of the most prominent social media platforms. To that end, many people rely on Tiktok for information on numerous things, including the DeFi technology.
Some nefarious individuals take advantage of this and, under the guise of 'crypto influencers, ' mislead others.
These influencers defraud others using the crypto-related hashtag "#cryptok" when creating their content. About 1,161 such videos were analyzed, and more than one in three were found to be disingenuous.
They try to persuade their viewers to invest their funds into this tech that might be valueless. Plus, only one out of ten such accounts cautioned users about the risks inherent in investing in this tech.
Being the most popular digital coin, one in three of these videos was found to have "Bitcoin" in them. Others with similar hashtags — like #cryptoadvice, #btctrading, and #cryptoinvesting — have together garnered more than 6 billion views.
Being such an influencer is a lucrative gig on Tiktok. However, it was also reported that 47% of creators were trying to get paid by initiating services.
This isn't the first incident of influencing gone wrong, though. There have been other celebrities that got into a controversy with the tech.
Mainstream influencers have, in the past, been caught in a web of controversies. They allegedly promoted the tech to their numerous fans without revealing the payments they got or the risks involved in the coins.
American lifestyle entrepreneur Kim Kardashian had to pay $1.26 million to the SEC – $260,000 in disgorgement and $1 million as a penalty – to handle her EthereumMax charge. She was charged for not divulging what she got paid to promote a post on EMAX tokens on her Instagram page.
Youtuber Logan Paul and legendary boxer Floyd Mayweather were also involved in the lawsuit, as they promoted the Ethereum-based token in the build-up to their boxing match. The token's value increased after the influencers' promotion, and fans bought pay-per-view tickets with it.
However, the token's value plummeted afterwards, incurring losses for many people. Paul and Mayweather were then charged for promoting the token without disclosing their compensation.
This list is almost endless and has a similar modus operandi: celebrities get paid to promote projects, most of which lose their value eventually and lead to heavy losses for the investors.
Viewers often make investment decisions based on the virality of celebrity-promoted content and end up disappointed.
Ultimately, investors are encouraged to research any project they intend to commit to.
