Despite this, Ethereum Max has been able to rope in influencers such as retired NBA superstar and Boston Celtics legend Paul Pierce as well as one of the most highly regarded boxers of all time Floyd Mayweather Jr. What’s even more alarming is that in recent months, this trend has been gaining a lot of traction, with a growing list of YouTubers, streamers, social media influencers seemingly jumping onboard the altcoin train to promote a lot of scammy projects seemingly every other day.
Things are Getting Murkier by the Day
While in the past, most influencers and celebrities tended to simply shill certain cryptos in lieu of money or resorted to using other promotional tactics such as giveaways, recently, things have started to become more sinister. For example, earlier in July 2021, world-renowned e-sports team, FaZe Clan decided to relieve Frazier Kay — formerly known as FaZe — of his duties with the organization while also issuing suspensions for three other team members.
The reason was that these influencers had come together to set up a crypto project called “Save the Kids” which upon closer investigation was discovered to be a pure pump and dump scheme. In essence, a pump and dump operation is one where scammers are able to rake in profits by simply pushing the value of an asset higher using various aggressive promotional means. When the asset’s price has been sufficiently artificially inflated, the scammers pull the plug and are able to walk away rich.
Influencers Promoting Crypto is a Dangerous Trend
As per data available online, a large portion of today’s crypto investor base lies in the 18-24 age range, a group that is especially susceptible to the influence of celebrities. In this regard, Dave Portnoy, founder of the sports and pop culture blog Barstool Sports, recently encouraged his followers to invest in Safemoon while absolving himself of any direct responsibility by issuing a disclaimer stating the he “wasn’t giving any financial advice”.
However, his statements, along with those of other celebrities resulted in SafeMoon pumping to all-time highs seemingly overnight — only for the asset to plunge and witness massive price corrections. In Portnoy’s particular case, he went as far as revealing that he had injected a sizable $40,000 into the cryptocurrency, something which many analysts believe to have been an unethical move.
Earlier this year, rapper Soulja Boy accidentally revealed that he was paid a handsome $24,000 for promoting a Safemoon spinoff project called SafeMars. And even though the tweet was promptly deleted after it was issued, it did showcase a lingering problem within the crypto community — there is no real way of stopping celebrities from shilling scammy projects.
Thus, when all is said and done, it is of utmost importance that users do their due diligence when investing in any project, be it new or old. This is because even today — despite the market’s relative maturity — there exist many scamsters who are looking to lure in unsuspecting customers and rip them off their hard-earned money by promising them insane overnight returns or unreasonable long-term yields.