Read 'em and Weep: Five Crypto Influencers Who Dealt Their Followers a Bad Hand
From fantastic price projections to paid project promotion without full disclosure, these crypto influencers played a losing game, dealing crypto recommendations that may have hurt their millions of followers.
Influencers, as their title suggests, have enormous leverage on social media, with an ability to introduce audiences to the latest trends and often persuade them to take action, such as making purchases based on the influencer’s recommendations.
When the product is a pair of kicks or a new phone, the buyers may be a few hundred dollars lighter but have designer goods to wear, show off and maybe even mock. When the product is crypto, however, buyers may have nothing to show for it except depleted savings if the tout goes south.
Here are some social media celebrities and high-profile crypto industry natives with millions of followers who have made spectacularly bad crypto promotions.
Crypto influencer Ben Armstrong, best known as “Bitboy Crypto” with over 1.4 million subscribers on YouTube, faced backlash over some of his hyped content, with one user going so far as to call seven of his touts outright scams in an investigative thread on Reddit.
The Atlanta native quickly gained attention in 2018 by sharing crypto trends, trading advice, project reviews and sometimes investment strategies, all while driving around in his car. In March 2022, he posted a video claiming his crypto portfolio was worth around $33 million and included bitcoin, ether and other altcoins.
In what may have been his most consequential failed tout, Armstrong was one of the most vocal supporters of crypto lender Celsius Network. He first talked about the lending platform in a 2018 project review video. “I do have faith in Celsius and I do believe it will be a successful project,” he said. In the March 2022 portfolio reveal video, he told his YouTube audience that the BitSquad held 25,000 of Celsius’ CEL tokens (worth over $83,000 at that time and around $23,000 as of press time).
Celsius froze billions of dollars from depositors in June, and Armstrong said he was one of the victims of the lending platform’s collapse. He admitted during his show that his team “worked with Celsius for years … some partnership stuff.”
Armstrong’s “affiliate link for Celsius” admittedly made it challenging for him to be the leader of a class-action lawsuit against Celsius because of such “conflict of interest,” he tweeted to his 900,000 followers on Twitter.
In a July Washington Post interview, Armstrong declared he has never been involved in a scam and his motivation was trying to “help people.” The following month, CNBC reported that Armstrong admitted he had entered paid partnerships. Armstrong said he felt responsible for losses suffered by his followers and said he stopped accepting pay for his promotions in January.
With 332 million followers on Instagram and nearly 74 million followers on Twitter, reality TV star Kim Kardashian plunged into trouble with the Securities and Exchange Commission (SEC) over a crypto promotion.
In October, Kardashian settled with the U.S. regulator, agreeing to pay a $1.26 million fine for not properly disclosing the $250,000 payment she received for promoting the ethereumMax digital token EMAX on Instagram.
The high-profile and prolific influencer, who usually hawks her family's reality shows, her own Skims shapewear line, other designers’ fashion – sometimes as paid ads – and lately her new criminal justice podcast, posted an Instagram story touting EMAX in June 2021.
“Are you guys into crypto????” the post began, along with a link to the EthereumMax project website. “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.”
Things didn’t work well for EMAX investors: the token price has plunged 97% since Kardashian’s post, CoinDesk reported this month. A British finance regulator at the time pointed out it was one of the biggest financial promotions in history.
Along with the fine, the SEC barred Kardashian from promoting any cryptocurrencies for three years.
Crypto investor Lark Davis is a go-to resource for many when it comes to learning about crypto trading. With over 1 million followers on Twitter and over 480,000 subscribers on YouTube, as well as a two-year-old weekly newsletter, Wealth Mastery, Davis has provided analytical videos on bitcoin and altcoins for five years. But recently he was hit with a storm of "pump-and-dump" allegations.
Self-proclaimed on-chain sleuth ZachXBT in September accused the New Zealand-based influencer of making over $1 million by dumping crypto projects. In a Twitter thread, ZachXBT traced Davis’ wallet and cited eight examples, beginning in February 2021, where Davis promoted low-cap crypto projects before dumping them.
Davis denied the allegations of shilling low-cap projects on Twitter, saying he has done “nothing wrong.”
Then ZachXBT made a second allegation, accusing Davis of withdrawing $2.5 million from crypto lender Celsius mere days before the now-bankrupt company froze withdrawals, swaps and transfers on June 12.
Davis posted videos with a Celsius referral link as recently as June 10. He had been promoting Celsius with his own promo code, LARK, to his YouTube audience throughout the first half of the year, CoinDesk found. A Twitter user pointed out that Davis promoted Celsius for weeks after he had begun making his withdrawals.
Davis has not responded to CoinDesk as of press time.
PlanB made his name as one of the top bitcoin influencers on Twitter, with more than 1.8 million followers, because of his invention of a bitcoin price forecast model he dubbed “stock to flow.”
The model predicts the bitcoin price based on its circulating supply relative to the number of coins mined each year, but it hasn’t been accurate lately. For instance, the model predicted bitcoin reaching over $100,000 on Oct. 23 when the largest cryptocurrency by market value was trading below $20,000.
Its increasingly off-kilter price forecasts have also been criticized by many in the crypto community, including Ethereum co-founder Vitalik Buterin.
Floyd Mayweather, Jr. earned 15 major world boxing championships and retired in 2017 from professional boxing with a 21-year undefeated record. But he got knocked by the backlash from several promotions of shady crypto projects.
Mayweather promoted initial coin offerings (ICO) to his 28.4 million followers on Instagram and 7.8 million on Twitter as early as 2017, including the now-inactive prediction markets platform Stox and the ICO project of a dubious financial provider called Centra Tech. “Centra's (CTR) ICO starts in a few hours. Get yours before they sell out, I got mine," he tweeted.
Centra Tech, which fraudulently claimed to be producing financial projects with Visa and Mastercard, was later halted by the SEC. The athlete in 2018 paid more than $600,000 in fines to settle SEC charges that he promoted ICOs without disclosing payments from token issuers.
Mayweather recently got sued again, along with Kim Kardashian, over his 2021 promotion of ethereumMax. As recently as late September, the boxing legend sought to dismiss the claims against him in a class-action lawsuit, arguing the lawsuit was an attempt to target his wealth.
The notoriety has not stopped Mayweather, however. He is currently touting his own non-fungible token collection, Mayweverse. Earlier this year, he promoted the Bored Bunny NFT collection, a send-up of Bored Apes, to his nearly 8 million followers on Twitter. Many have accused the founders of Bored Bunny of orchestrating a rug pull.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.