A lot of dubious trends can be associated with cryptocurrency. The paid promotion associated with specific projects has raised numerous questions. It now seems most self-professed crypto asset experts will gladly offer positive reviews for a fee. That is a worrisome situation, as this “paid shilling” skews information for investors.
Cryptocurrency Shilling for Money
The cryptocurrency industry allows many new business models to thrive. In most cases, those jobs are perfectly legitimate. One new trend identified by Reuters is of particular concern, however. Companies can effectively hire self-professed ‘experts’ to write positive reviews about their crypto assets. This is usually done in exchange for a financial payment. It is not a business model unique to cryptocurrency, albeit one that can have major consequences.
Any influencer in the cryptocurrency industry can be a viable asset for new projects. As such, they often seek people for “shilling” purposes. This model revolves around having people purposefully promote a currency or asset in exchange for money. It often does not matter if the project is legitimate, as long as the money is paid accordingly. Those are the findings of Reuters in a recent special report.
A lot of money can be earned or lost in the cryptocurrency industry. Any promotional effort promising “major potential returns” raises a lot of suspicions. Most influencers involved in shilling do not even disclose the financial relationship with the project they are promoting. As such, novice investors are often tricked into committing funds to a project which may not have any long-term plans.
Paid Endorsements Raise Questions
Several important aspects need to be highlighted in this regard. First, there are those willing to do anything for money in the cryptocurrency industry. While everyone needs to make money, potentially tricking investors into spending money is never an advisable option. Especially not with so many governments scrutinizing companies and their associates in this industry.
Secondly, the companies paying anyone to engage in shilling. Worthwhile projects never need to resort to solutions like these. If there is a working project and a long-term roadmap, the success will materialize on its own. Resorting to cheap trickery will harm these companies more than anything else. Moreover, it makes cryptocurrencies look even more suspicious to the general public.
Assuming this trend is genuine, there will be further crackdowns by government agencies. Paid promotion of new projects has already caused problems in the past. Centra is a notorious example in this regard. Floyd Mayweather Jr. promoted this project which turned out to be a fraud in the end. While he did disclose the paid promotion, celebrity endorsements are now no longer allowed. The same may apply to paid shilling if this trend gets out of hand.
What do you think of paid crypto shilling? Is there ever a legitimate reason for it? Let us know in the comments below.
Images courtesy of Shutterstock
