Crypto firms and influencers cut back on endorsement deals amidst FTX lawsuits.

Crypto influencers are being more cautious about endorsement deals following the collapse of crypto exchange FTX last year. Several celebrities have been hit with a lawsuit for their alleged role in promoting the exchange. In March, a $1 billion class-action lawsuit was filed alleging that eight influencers promoted “FTX crypto fraud without disclosing compensation.”

Influencers have stated that the lawsuit has served as a wake-up call, and they need to understand that their followers can take legal action against them in the future if the endorsed company turns out unfavorable. Tiffany Fong, a crypto vlogger who gained fame by interviewing former FTX CEO Sam Bankman-Fried after the collapse, is not interested in endorsing crypto firms on her social media at the moment. Fong has received numerous offers but hasn’t responded to most of them because she believes the risks outweigh the rewards.

DeFi Dad, who has 152,300 followers on Twitter, has also turned down a sponsored content opportunity from FTX. Marketing agencies have noticed fears from both influencers and crypto firms. Nikita Sachdev, CEO and founder of Luna PR, explained that both sides of the business are becoming more cautious about endorsement deals.

Rasmus Rasmussen, chief marketing officer of Polygon NFT game Planet IX, told Cointelegraph that securing A-lister influencers to promote crypto has become increasingly challenging after the collapse of FTX. However, the fees being charged when these deals are executed are staggering.

Influencers charge as high as 6 figures for sponsorship deals, and celebrities endorsing web3 projects charge in the millions. Meanwhile, Mason Versluis, who posts as Crypto Mason to over a million followers on TikTok, has seen an increase in crypto brand deals “for the wrong reasons.”

Crypto vlogger MegBzk suggests that influencers need to conduct their own research before endorsing a firm. “You need to know inside and out who you are working with, to the best of your ability [and] have multiple people look at them,” she said.