Kim Kardashian West, Charli D’Amelio and Jake Paul publish paid crypto ads
As cryptocurrency has become more mainstream this year, it has reached the influencer world. Influencers like the D’Amelio family and Tana Mongeau have started posting paid advertisements for various digital coins and exchanges on their social media platforms.
Even Kim Kardashian West posted an ad for ethereummax to her 228 million followers on her Instagram story on Sunday.
Followed by a short clip in which she talks about Ethereummax with her camera, with “#ad” written at the bottom of the screen, Kardashian West posted a text: “Are you into crypto ???”
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“This is not financial advice, it tells me what my friends told me about the Ethereum Max token!” read the post. She again added various hashtags, including #ad, which is required to show that her post is paid, along with #emax and #disrupthistory.
Other celebrities, including Floyd Mayweather, have also endorsed Ethereummax. Mayweather brought up the altcoin during the Bitcoin 2021 conference earlier this month and was again booed off the stage. Ethereummax was also accepted as payment for tickets to Mayweather’s recent fight with YouTuber Logan Paul.
Ethereummax is an altcoin that redistributes a small percentage of transactions to its token holders. It started in May with a total supply of 2 quadrillion.
However, despite its high profile partnerships, Ethereummax is viewed as a riskier cryptocurrency for some in the crypto world. As Decrypt points out, it is “mostly just a marketing campaign.” Ethereummax does not have a whitepaper like other crypto projects, and few details are known about its developers.
“Ethereummax is much more than a ‘marketing campaign’, we’ve filled a void and created a much-needed move in the crypto space,” members of the Ethereummax team told CNBC Make It. They said the team was “hard at work” on one White Paper on Currency Worked. “What I can tell you is that we are determined to deliver something special for our EMAX whitepaper,” said the team members.
“After all, when it comes to transparency, we have one of the strongest and most honest voices in the crypto community,” they said.
While it is unknown how much Kardashian West was paid for the advertising, a 2019 court file found that she can reportedly make between $ 300,000 and $ 500,000 for a single Instagram post. She can make millions of dollars at times for long term social media deals. (Kardashian West didn’t immediately respond to CNBC Make It’s request for comment.)
Younger influencers are also getting into crypto
Gen Z and young millennial influencers – many of whom have mostly young followers – have also been running paid ads for cryptocurrencies and exchanges recently.
The family account of TikTok stars Charli (17) and Dixie D’Amelio (19) posted their partnership with the Gemini cryptocurrency exchange on Instagram in May, Insider reported.
“We are learning more about cryptocurrency as a family, thanks @gemini for Charli’s birthday present. #GeminiPartner “, it says in the post, although Gemini has an age requirement of 18 or older.
The family’s account has over 934,000 followers on Instagram, but Charli and Dixie have even bigger followers themselves. Charli has over 117 million followers on TikTok and over 42 million on Instagram. Dixie has over 52 million followers on TikTok and over 24 million on Instagram.
“We believe it is important to provide financial literacy and access to educational resources about cryptocurrency through a variety of channels,” a Gemini spokesperson told CNBC Make It. “Gemini also works with influencers … to educate and raise awareness about cryptocurrency to their followers sharpening for the Gemini brand. “
Along with the D’Amelio family, YouTubers like Paul and Loren Gray have published recommendations for various cryptocurrencies and exchanges for their millions of followers. Even Matt James, known as the first black male lead actor on ABC’s “The Bachelor,” posted on his social media about his partnership with crypto financial services company BlockFi.
Why it matters
While all cryptocurrencies are viewed as a risky, volatile investment, the altcoins being pushed aside by these influencers like Ethereummax require even more caution, experts warn. Especially when it is being promoted to a younger audience.
That kind of support can be especially problematic if it isn’t made clear that the influencer was paid for the post, James Ledbetter, editor of fintech newsletter FIN and a CNBC contributor, told CNBC Make It.
“As with many other products and services these days, a cryptocurrency or an exchange-paying social media influencer can be an effective way to get the message across,” he says.
“I would worry, however, that at least some of this audience is both financially illiterate and has limited access to funds, which is why this has been an area of regulatory action for years.”
Investors should always do their own research before deciding where to invest their money. As the SEC warned in 2017, “It is never a good idea to make an investment decision just because someone says a product or service is a good investment.”
“These types of agreements could potentially harm investors and subject the crypto companies to regulatory scrutiny,” says Ledbetter.
But after seeing the effect Tesla and SpaceX CEO Elon Musk’s tweets had on cryptocurrencies and stocks, it should come as no surprise that companies in space are trying to find more players to do the same, Ledbetter says.
“With crypto memes and Elon Musk, I feel like a good helping of [young investors have] already exposed to cryptocurrencies, “says Ledbetter.” But it is conceivable that influencers will accelerate this trend. “
Correction: This story has been updated to show that Ethereummax was accepted as payment for tickets for Floyd Mayweather’s recent fight against Logan Paul. In a previous version, Logan Paul’s name was incorrectly entered.
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