Non-functioning tokens, better known as NFTs, and cryptocurrency are still making waves for all the wrong reasons – scams, cons and phishing give these digital technologies a bad name.
As Anna Collard, Senior Vice President of Content Strategy and Evangelist at KnowBe4 Africa, a cybersecurity awareness agency, explains, this is largely because the line between legit and scam is very blurry and hard to see for most people.
“Digital assets like NFTs are being used to encourage engagement in the virtual space,” Collard says.
“They are also used to manage brand collaboration, reward consumers, and build brand loyalty and customer relationships. However, they don’t necessarily work as well as they should, and lawsuits have already been filed against celebrities and influencers.
The Rise of NFTs
NFTs are unique digital tokens embedded in a blockchain that can be valued. Currently, NFTs are to blame for everything from design to music to artwork. Indeed, the Twitter founder recently sold one of his tweets for $3 million.
NFTs can be used to assign ownership of a digital asset, enable tracking of previous owners using the blockchain and can be used to attach a value – often speculative – to the asset. The most famous example of this is Bored Ape, an NFT series that sold over $450,000 to celebrities.
Kim Kardashian, Floyd Mayweather and the Scams They’ll Promise
However, celebrities (and influencers) are getting into digital hot water for promoting NFTs or cryptocurrencies that aren’t necessarily legit or don’t deliver what they promise.
Perhaps one of the most famous cases is that of Save the Kids, an initiative launched by influencers as the ultimate means of rescuing children in need while making money for its investors.
A digital win-win, if you will. It failed and today it is a worthless crypto token that has caused people to lose money. A number of influencers involved in the initiative belonged to the hugely popular FaZe e-sports clan and some were subsequently removed or suspended, but the damage has been done by adding these funds to the growing number of crypto scams that are making money. gets to people. .
According to research, scammers got lost with about $14 billion worth of cryptocurrency in 2021, and this could most likely count given the profitability of this market.
A recent article in Time magazine highlighted three of the biggest scams: CSGOLotto, a scam in which two influencers were charged; Centra Tech, a bogus project that used influencers to fool millions and took a closer look at two other celebrities – DJ Khaled and Floyd Mayweather – and pump and dump systems using NFTs.
More recently, Kim Kardashian and Jake Paul have joined the ranks of celebrities and influencers accused of playing the pump and dump game and are currently under investigation for promoting EthereumMax.
The case is still ongoing, so the outcome remains uncertain, but one thing is certain: this is not a safe place for people’s money and we cannot trust influencer marketing.
The future of “virtual influencers”
“There is also an increase in virtual influencers, bots that are replacing people as trendsetters on social media,” Collard says.
“You have Shudu, a virtual model, and Lil Miquela, a 19-year-old virtual boy with digital mood swings. These are just two of a growing list of virtual personas that have massive followings and agencies making a ton of money endorsing brands like Vogue, Chanel and Fendi,” Collard added.
“It’s a remarkable testament to the wonders of digital, but it should also come with more transparency. People need to know who owns and controls them, and influencers should publicly announce that they are being paid for potential NFTs or crypto projects – especially if it is advertised as a potential investment opportunity or financial product to minimize the risk of abuse or fraud.
The fact of the future is that, well, the future is digital. Yes. But it must also be safe, visible and transparent. Before viewing any NFT or cryptocurrency recommended by an influencer or celebrity, do your due diligence.
Anything else is risky, or most likely a scam, Collard says.