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The Dark Side of Social Media: Crypto Scam Influencers

CryptoWhale
CryptoWhale
Influencer marketing has hit the crypto world, with coin companies paying influencers thousands and sometimes millions to promote their companies.
This has led to the rise in many fraudulent, and worthless cryptocurrencies as people blindly throw their money into anything being shilled by these seemingly reputable and trusted “celebrities”
Celebrities Being Paid To Shill
During the 2017-2018 Market Bubble, we saw a massive surge in celebrities taking advantage of people’s greed and emotions by advertising cryptocurrency investments to the masses.
We saw Paris Hilton, Steven Seagal, Floyd Mayweather, Akon, Mike Tyson, Ashton Kutcher, Gwyneth Paltrow, and many more shill coins.
In 2021, this number has multiplied drastically as hundreds of new celebrities, YouTubers, models, actors, DJ’s and politicians join in on trying to profit from the crypto-frenzy.
When it comes to investing, the last person you should listen to for financial advice is someone who lacks any real knowledge of the industry, and especially someone being paid to make certain comments.
Dozens of these celebrities are being paid to “shill” certain tokens, many of which are fraudulent. This has already led to massive losses for some clueless retail investors.
Lindsay Lohan - Paid to Shill “Tron” Token
Back in February 2021, Lindsay Lohan gained lots of attention on social media after tweeting about Tron coin, which is a very shady cryptocurrency run by a career criminal known as Justin Sun.
This tweet was clearly a paid shill, and that was later confirmed by Marques Brownlee in a Youtube video where he shared his own experience with being offered payments from Tron.
Soulja Boy - Paid to Shill “SaferMars”
Just a few days ago, Soulja Boy posted a tweet telling his followers that “Safermars” looks like a promising coin. He had copied and pasted the email the company sent to him and accidentally left in the part about how much they are paying him ($24,000)
Immediately after, he deleted the tweet, reposted it, and removed that sentence. This is just another example of how these influential pages are being paid to shill.
The Danger of Pump and Dump Schemes
Traditionally, pump and dump scams occur when a small group of investors decides to purchase stock in a company with low market value AKA at a low share price. They then enlist other investors to buy-in under the guise that the company’s value is increasing. As more people buy-in, this ‘pumps’ the stock price up.
The initial investors then sell their stock at a much higher price than they purchased it for, making money on an artificial capitalization they essentially created. Selling bulk stock that was purchased at a low price drives the current price down— hence the ‘dump’— and other investors suffer significant losses.
While this practice is illegal on equity markets, the cryptocurrency market remains relatively unregulated and thus these scams have become increasingly prevalent.
Def Noodles
TOTALLY UNEXPECTED: Jake Paul, Keemstar, Lil Yatchy and Lance Stewart allegedly promoting alleged crypto scam #SAFEMOON, according to multiple media outlets and crypto watchdogs. SafeMoon lost 3/4 of it’s value days after Keemstar tweeted about it saying “bro we’re rich!” https://t.co/tmEYh0Ev1d
Why are influencers getting involved?
Unlike traditional pump and dump schemes which rely on trading boiler rooms to call up potential investors and convince them to buy stock in the target company, cryptocurrency pump and dump schemes rely on social media to function, making influencer marketing the perfect medium to facilitate these schemes.
These schemes target low capitalization cryptocurrencies and digital tokens that can easily be manipulated with low trading volumes, Instead of boiler rooms, the price pumps are conducted by spreading hype and fake information about a coin on social media.
In these instances, the influencer tells their millions of followers that they’re making money off a crypto coin. A fraction of their followers will invest in said coin, expecting to make gains as well. As more followers buy-in and the price spikes, the influencer sells their shares and makes a profit, driving the share price down and thus screwing their followers out of the same return. Though different variations of this scenario can play out depending on how the coin functions (some are more transactional while others function more like pyramid schemes), the result is similar— the influencer walks away with the profit they indirectly took from their fans’ own pockets.
I've received many paid offers.
Over the last several months, my account has grown significantly and has just surpassed the 200,000 follower mark. With this amount of followers, many companies have directed their attention to me and proposed sending me money to advertise their projects.
I have never once accepted funds from anyone to advertise a project. I will never tell someone to buy something and always encourage everyone to do their own research. To me, being a paid shill is unethical and wrong.
How to Protect Yourself?
As stated in my previous articles, I strongly believe the crypto sector is nearing a potential bear market. We have record levels of retail heavily invested at the peak, with more euphoria than ever before.
The statement “we are early” is undoubtedly false. We have dozens of porn stars, failed actors, and comedians now urging people to buy-in. This isn’t typical in healthy markets and is a red flag to all sane investors.
To protect yourself, you must always make sure to never blindly follow other people’s investment advice. It’s always your responsibility to do your own research, and manage your risks.
There’s a slim chance anyone gambling into coins being shilled by famous celebrities will end up with realized profits. It’s essentially a game of musical chairs, and nobody knows when the music will stop.
If you can’t get out in time, you may be stuck bag-holding Snoop Dog’s or Lady Gaga’s CumRocket or SafeMoon coins, which would probably not be a fun experience.
Thanks for reading!
If you want to read my previous articles, you can do so by going to www.whalestreet.ca! More newsletters coming very soon!
Have a great day everyone! 🐳
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