Tags: crypto | currency | influencers | coin | offerings

LA Times: Crypto Backers Hype Offerings at '$105,000 a Tweet'

LA Times: Crypto Backers Hype Offerings at '$105,000 a Tweet'
(Elnur/Dreamstime)

By    |   Wednesday, 27 June 2018 10:38 AM

There is word of yet another questionable tactic surrounding the controversial world of digital currencies.

The Los Angeles Times explains that “the thriving but murky world of cryptocurrency ‘bounty campaigns’ has social media influencers getting paid to promote initial coin offerings, or ICOs, by the entrepreneurs (and in some cases scammers) behind those offerings.”

Crypto celebrity John McAfee boasted earlier this year that he charged $105,000 a tweet to tout virtual currencies, the Times explained.

Such bounty campaigns are one reason initial coin offerings are raising money at a record pace, despite the ad bans and this year’s steep selloff in virtual currencies such as bitcoin, the Times said.

Bounty-campaign advocates claim such tactics are a low-cost method to creating brand awareness.

Detractors claim such tactis only lead to hype and inaccurate information.

In jurisdictions where ICOs are considered securities, such tactics might violate broker-dealer regulations, the Times said.

“Once it becomes clear that financial outcomes can be manipulated not just by trading but [also by] creating perceptions through social media, regulators will take a very hard stance,” said Lex Sokolin, global director of fintech strategy at Autonomous Research in London.

Facebook Inc. on Tuesday decided to allow certain ads promoting cryptocurrency and related content from pre-approved advertisers, but would continue its ban on those tied to binary options and initial coin offerings.

Facebook (FB) had in January banned ads that promote financial products and services that are frequently associated with misleading or deceptive promotional practices, Reuters reported.

Meanwhile, bitcoin stayed above $6,000 on Tuesday after having dropped below that threshold for the first time since February over the weekend. The largest cryptocurrency has tumbled this year as regulators spanning the globe step up scrutiny of what critics say is a vehicle for fraud.

For his part, Nobel economics prize winner Robert Shiller continues to be skeptical about the longevity of cryprocurrenices. He described bitcoin is a social movement whose popularity splits along geographic lines in the U.S.

“The East Coast is less into it than the West Coast,” Shiller said Tuesday in a Bloomberg Television interview. “Silicon Valley is really into it. This to me shows that this is not a rational response to new information,” he said. 

“It’s a social movement. It’s an epidemic of enthusiasm,” the Yale University economics professor said. “It is a speculative bubble. That doesn’t mean that it will go to zero.”

(Newsmax wire services contributed to this report).

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The Los Angeles Times explains that “the thriving but murky world of cryptocurrency ‘bounty campaigns’ has social media influencers getting paid to promote initial coin offerings.
crypto, currency, influencers, coin, offerings
406
2018-38-27
Wednesday, 27 June 2018 10:38 AM
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