Should we trust crypto influencers?

Posted November 30, 2022 10:53 AMUpdated November 30, 2022 11:19 AM.

“Everyone wants to be influential, but when you become one, it’s not good,” says Owen Simonin. It has the worst value in the world. Better known as Hasheur, he runs a YouTube channel of the same name dedicated to the world of cryptocurrencies. He is the most influential person in the digital asset industry with over 600,000 subscribers and two videos that have surpassed one million views, including his “rookie mistakes”. Owen Simonin is also the CEO of investment firm JustMining and Hash Consulting, an influential agency. He himself prefers to define himself as an “entrepreneur” because he claims to devote only 5% of his time to his activities as an influencer, but happily accepts this qualification.

Activities financed mainly in three ways. First, with YouTube monetization, thanks to ads that are inserted during his videos. Secondly, affiliation, that is, a referral system, sometimes with hyperlinks in their clips. Finally, what he calls “direct sponsorship”, that is, the fact that a service or product is mentioned in his video for a fee.

All these collaborations must be declared. For influencers, it’s the same as for the press: an advantage, even a meal in a restaurant that clearly entails a reward, such as a publication or any other promotion, and the author moves into the field of advertising. The law, in particular, states the following: “Any publicity […] should be able to be identified as such. It must clearly identify the natural or legal person on whose behalf it is being carried out. “These clarifications take the form of a ‘paid partnership’ label or even a ‘message from the beginning of the video’,” explains Owen Simonin.

iconic cases

Problem: Some influencers are not shy about ignoring their business relationships to the detriment of the overall image of their profession and cryptocurrency. We remember the Nabilla case: in 2021, a reality TV star had to pay a €20,000 fine. She was detained by the Directorate General of Competition, Consumer Affairs and Fraud Prevention (DGCCRF) for promoting a crypto platform without indicating that the company was paying her in return. The procedure that saved him from trial: “Misleading commercial activities are punishable by a maximum fine of 300,000 euros and two years in prison,” emphasizes Mohamed Mansouri, deputy director of the Self-Regulatory Body for the Regulation of Professional Advertising (ARPP). for the communications industry. So Nabilla is not so bad out. »

More recently in the US, another reality TV star, Kim Kardashian, suffered the same fate, but not to the same extent: The Securities and Exchange Commission (SEC), the policeman of the American markets, fined him $1.26. million for advertising cryptocurrency, again without mentioning his monetary ties with issuers.

Supervise and train

In an attempt to clean up influencers, ARPP has deployed an algorithm on social media that is designed to scan all of their posts and flag those that seem most suspicious: those that have an overly positive tone for a product or service. “In 2021, a quarter of the content hid commercial intent,” says Mohamed Mansouri. This year, the phenomenon has decreased by 10 points, there is an improvement. It must be said that the audience cannot be deceived; hidden sponsor, this can create a nasty buzz. “If there is a relapse, despite the ARPP warnings, she practices ‘name and shame’ (reveals the names of unscrupulous influencers). “We can also send files to the authorities,” explains Mohamed Mansouri.

In terms of prevention, ARPP has created a certificate of responsible influence. Thus, 150 lucky ones were identified in September. Everyone completed a three-hour online course on the legal and ethical rules of their activities. The certificate is issued on the condition of passing the exam, in which more than 70% of correct answers must be received.

Now ARPP wants to go further, especially in relation to financial assets, including cryptocurrencies, with a special certificate. This will be confirmed by additional training and attention to certain aspects, such as “fairness in relation to the risks involved,” Mohamed Mansouri clarifies. This new certificate, developed in collaboration with the Autorité des Marchés financiers (AMF), should see the light of day in the spring.

Influencer is not an advisor

However, this does not mean that influencers will be empowered to give advice: “When we talk about advice, we are talking about something very specific,” explains Claire Castanet, director of investor relations and protection at AMF. This is a personalized individual recommendation to invest in a very specific product. Influencers force contributors to make their own choices. “There is no legal definition of the work of an influencer, but Claire Castane equates this profession with the field of advertising. She notes that the range of actors is very wide: from a person-sandwich to a person inclined to convey information. Thus, the challenge for them, as well as for the authorities, is to properly demarcate the registers. This does not exempt from the dangers inherent in cryptocurrencies, for which the risk of partial or complete loss of capital is significant.

This certificate will also not prevent unscrupulous influencers from continuing their activities from abroad and rising in the news feeds on the main Internet platforms or even appearing directly in their advertisements. Perhaps the web giants should also be made to be more vigilant, but that’s another job.

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker.