Crypto crisis: Influencers draw flak over ‘misleading communication’

There is no end to crypto controversies. While the downturn in the crypto sector has already made investors anxious, the latest crisis at crypto exchange Vauld has turned the heat on influencers who have been promoting the Singaporean exchange on social media channels.

On July 4, Vauld suspended all transactions – tradings, withdrawals, and deposits – on its platform citing volatile market conditions and financial difficulties of its business partners. According to media reports, Vauld was being acquired by London-based crypto exchange Nexo.

The development has left over an estimated 8,00,000 Vauld investors stranded with no clue if they would get back their money. Most of the Indian investors are reportedly students and youngsters who deposited their small savings after getting “influenced” by content creators or ‘finfluencers’. Vauld was being promoted as a ‘crypto FD’ (fixed deposit) on social media platforms.

Equity investor Azhar Jafri, in a series of tweets, called out several top YouTubers such as Akshat Shrivastava, Anish Singh Thakur, P.R. Sundar, Ankur Warikoo and Anant Laddha, saying that they were recklessly promoting Vauld.

The influencers are now on the back foot, saying they too have money invested in Vauld and that the crisis is not a “scam”.

“These influencers have been promoting crypto, including Vauld, as educational content. Vauld was being projected as digital FD,” a Vauld investor, who is currently pursuing CA, alleged.

A CoinSwitch spokesperson told e4m that all norms are being adhered to with regard to influencers. “While we cannot comment on other businesses, at CoinSwitch, user safety is of utmost importance. We strictly adhere to The Advertising Standards Council of India (ASCI) guidelines for influencer advertising in all our influencer-led user awareness initiatives on owned, earned, and paid communication platforms. We will continue to work with relevant stakeholders in our efforts to build a crypto-investing ecosystem that regulators and users can trust.

Due diligence must: ASCI

Further on adherence to guidelines,  Manisha Kapoor, CEO of The Advertising Standards Council of India (ASCI) said, “Influencers, like all endorsers, need to do full due diligence before talking about products, regardless of the category. Our guidelines for influencer marketing articulate this in great detail.”

“Crypto is a relatively new sector, which is unregulated, and investments in this space are highly volatile in nature. While consumers need to be aware about this, crypto exchanges, too, need to carry the mandated disclaimer in their advertising informing them about it,” she added.

Rise of Finfluencers

The Indian influencer marketing industry is estimated to be around Rs 900 crore, according to GroupM INCA’s India Influencer Marketing Report. The market is expected to grow at a compound annual growth rate of 25% till 2025 to reach a size of Rs 2,200 crore.

Amid the rapid rise of start-ups in the fintech and crypto ecosystem in India over the past year, finfluencers have emerged as a key category of creators. They charge Rs 10 lakh to Rs 30 lakh to promote financial products, industry experts say.

According to a McKinsey & Company report, over 80 per cent of Indian customers will consider a new company based on a significant influencer’s suggestion.

Simultaneously, they are increasingly becoming a new category of local digital influencers, without whom it is impossible to picture corporations expanding into new international markets, the report points out.

There has been significant growth in regional communications as well because brands have realized that people connect better when the communication is done in their own language.

“While an increasing number of regional influencers are helping brands to expand their footprint across India, some are misleading innocent consumers, deliberately or inadvertently,” an advertising expert says.

Apart from crypto brands, the crisis also raises questions over paid partnership deals that are executed through influencer marketing agencies.

In their defence, influencer marketing agencies, however, claim that they take utmost care before collaborating with brands, especially if they are financial products.

Payal Sakhuja, Co-founder and CEO of influencer agency Ripple Links, says, “We collaborate with those brands only whose product claims they are convinced with. For any campaign, whether the brand belongs to the BFSI category or even the FMCG space, we ensure that content pieces are vetted internally as well as by brand teams to ensure that they are brand-safe and only share legitimate information.”

We also ensure that any claim made by influencers is approved by the brand’s legal and compliance teams, Sakhuja added. All brands and influencers need to go through checks as a standard process to ensure that they are safe, she added.

Sharing a different perspective was Lloyd Mathias, Business Strategist and Angel Investor. “Pinning down the responsibility of losses being faced by cryptocurrency investors on finfluencers may be unfair. However, the issue does point towards the glaring lack of oversight in how crypto currencies are being administered.”

 “The finfluencers haven’t deliberately misled consumers. However, the cryptocurrency market, which was booming till recently, has spawned a wave of crypto-influencers, many of whom have capitalized on rookie investors striving to get rich quick.”

Read more news about (internet advertising India, internet advertising,
advertising India, digital advertising India, media advertising India)

For more updates, be socially connected with us on

Source link

What do you think?

Written by Bitcoin

Trump left board of his media company ahead of subpoenas, filing shows

Social Media Reacts To The Black Music Honors Keri Hilson Tribute