Australia’s Four Corners exposes the harsh reality of crypto marketing

This week ABC Australia’s Four Corners broadcast ‘Crypto Mania’ – a documentary investigating cryptocurrency and the questionable ethics of its marketing.

Cryptocurrency marketing is impossible to ignore these days. It seems almost every major sporting and entertainment event is sponsored by a crypto company, with them paying top dollar to ensure their brand is highly visible. For one particularly high-profile example, last year Crypto.com paid $700 million for the naming rights of Staples Center in LA to become the “Crypto.com Arena”.

Significant amounts of money are being spent on marketing cryptocurrency to the mainstream audience across the globe, but at what cost?

Is it selling the false idea that anyone can have opportunity to get into cryptocurrency and become a millionaire?

David Scott, Managing Director of Scott+Scott was interviewed in the Four Corners report and said that cryptocurrency is the “perfect thing for the times… it’s that wanting to be famous, wanting to be great looking, and to add to the final layer, I want to be rich. If I do what this celebrity does. I’m going to be rich.”

Mr Scott is preparing a multi-million dollar lawsuit on behalf of his clients after the alleged “rug-pull” with crypto project EthereumMax. The project paid high profile celebrities such as Kim Kardashian to endorse EthereumMax to their followers, which resulted in a massive spike in the EthereumMax popularity, before the founders “cashed out and made a fortune”. This resulted in the coin plummeting 98% in value.

“Kim Kardashian has 250 million Instagram followers, imagine the influence she has. The celebrity endorsing it. The social media reach. It’s a deadly combination,” Scott said.

Molly White, a software engineer from Boston and a prominent cryptocurrency critic that was also interviewed for the show, believes that cryptocurrency marketing is targeted towards the naïve, saying she has “become concerned the marketing for crypto is for the person who is not tech-savvy, and doesn’t normally invest in highly speculative assets.”

It’s always advised that people do their own research before investing, however with cryptocurrency having celebrity endorsements and huge advertising spends to ensure high visibility, it’s tempting for even those with no investing experience.

Steve Johnson, an Australian fund manager at Forage Funds Management was a third person interviewed for the broadcast, and said “this is the first truly global mania we’ve had, with the internet and social media, it has allowed people to promote these schemes all over the world, not just in one country.”

The Four Corners episode makes the potentially damaging impact of crypto advertising and marketing clear. Historical precedent in Australia suggests that when that happens, regulation is tightened to make it harder for these products to sell (think tobacco or gambling). Could crypto advertising likewise find itself restricted by law?